Modvat credit limitation on older duty documents: conflicting views led to reference of the legal questions to the High Court.

Conflicting Tribunal views existed on Modvat credit entitlement where duty-paying documents were issued more than six months earlier. The larger Bench view, as relied upon, treated the amended rule as barring credit beyond six months from the date of the duty-paying documents, while earlier Tribunal reasoning had treated pre-amendment credit entitlement as a vested right. Because of this divergence, the reference application was allowed and the questions of law were referred to the High Court of Madhya Pradesh for opinion.

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Issues: Whether the reference application should be allowed and the questions of law concerning Modvat credit under the Central Excise Rules, 1944 be referred to the High Court.

Analysis: There were conflicting views on the entitlement to Modvat credit where duty-paying documents were issued more than six months earlier. The larger Bench view, relied upon in the order, held that after the amendment the assessee was not entitled to take credit beyond six months from the date of the duty-paying documents. In view of the divergence in views and the earlier Tribunal approach treating the pre-amendment credit entitlement as a vested right, the matter was considered fit for reference.

Conclusion: The reference application was allowed and the matter was referred to the High Court of Madhya Pradesh for opinion on the stated questions.

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