Modvat credit on pre-1994 gate passes remained disputed over whether later credit could be denied under the notification.

Modvat credit on gate passes issued before 1-4-1994 was disputed where the credit was taken after 30-6-1994 under Notification No. 16/94-C.E. (N.T.). The departmental view was that the notification restricted such gate passes to credits taken on or before 30-6-1994, while earlier Tribunal rulings had held that a valid gate pass could not be denied merely because credit was taken later. One Member accepted that the notification conditions had legal force, but noted conflicting Tribunal decisions and concluded that the issue required authoritative resolution by a Larger Bench. The matter was therefore referred to the President for placement before a Larger Bench.

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Issues: Whether Modvat credit on gate passes issued before 1-4-1994 could be denied merely because the credit was taken after 30-6-1994 under Notification No. 16/94-C.E. (N.T.) dated 30-3-1994.

Analysis: The order notes the departmental view that the notification restricted use of such gate passes to credits taken on or before 30-6-1994, while earlier Tribunal decisions had taken the contrary view that the notification could not curtail the substantive entitlement to credit once the gate pass was a valid document. The Member disagreed with the earlier view, stating that conditions in the notification had legal force, but since conflicting Tribunal decisions existed, the matter required resolution by a Larger Bench.

Outcome: The issue was referred to the Hon'ble President for placement before a Larger Bench to resolve the difference of opinion.

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