Modvat Credit on endorsed gate passes upheld where no governing rule was breached and no referable question of law arose

Endorsement in gate passes, where accepted by the department and not contrary to any governing rule, did not by itself disentitle the assessee to Modvat credit on inputs. The Tribunal held that the Revenue's reliance on a different decision involving subsidiary gate passes was inapposite because the issue was materially different, and the number of endorsements in the present case did not breach any rule. As no referable question of law arose from the denial of credit, the Revenue's reference application was dismissed and the assessee's entitlement to Modvat credit remained undisturbed.

---

---

Issues: Whether the Revenue's reference application raised any referable question of law arising from denial of Modvat credit on inputs cleared through endorsed gate passes.

Analysis: The Tribunal noted that the respondent's claim to Modvat credit had been rejected on the ground of wrong availment, but the earlier decision in the appeal had turned on the fact that the goods were transferred through endorsements in the gate passes. The Department's reliance on a different decision concerning endorsements in subsidiary gate passes was held to be irrelevant because the issue there was materially different. The Tribunal found that the number of endorsements made in the present case did not violate any rule so as to disentitle the respondent from Modvat credit.

Conclusion: No referable question of law arose for consideration, and the Revenue's reference application was dismissed.

Final Conclusion: The respondent's entitlement to Modvat credit remained undisturbed, and the Revenue failed to secure reference to the High Court.

Ratio Decidendi: Endorsement in gate passes, where accepted by the department and not contrary to any governing rule, does not by itself disentitle the assessee to Modvat credit, and a reference application raising no referable question of law is liable to be dismissed.

---