Transit credit on endorsed gate passes for part consignments accepted where departmental practice supported the claim.

Transit credit could not be denied where endorsed gate passes covered part consignments and were accepted as duty-paying documents. The Tribunal treated departmental trade notice practice as generally applicable, not confined to one Collectorate, and relied on its earlier view that such endorsements were valid for credit purposes. On that basis, the objection that the consignments were not fully covered and that the conditions of Notification 16/94 were not established failed, and credit was allowed with consequential relief.

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Issues: Whether transit credit could be denied on the ground that the gate passes covered only part consignments and whether endorsed gate passes were acceptable duty-paying documents for availing the credit.

Analysis: The availability of the facility was supported by a trade notice issued by one Collectorate, and that notice was treated as an expression of departmental practice applicable generally and not confined only to that Collectorate. The Tribunal also relied on its earlier view that gate passes endorsed for part consignments were acceptable duty-paying documents. On that basis, the objection that the consignments were not covered in full and that the conditions of Notification 16/94 were not shown to be satisfied did not survive.

Conclusion: Transit credit could not be denied on the facts of the case, and the endorsed gate passes were held to be acceptable documents. The appeal was allowed in favour of the assessee with consequential relief.

Ratio Decidendi: Endorsed gate passes covering part consignments can be accepted as duty-paying documents for transit credit where departmental practice supports such endorsement.

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