No referable question of law arose on Modvat credit choice where exemption was available, and new grounds were barred.

No referable question of law arose from the Tribunal's earlier view that an assessee could choose between exemption on the final product and Modvat credit on inputs, even in light of the Andhra Pradesh High Court decision relied on by the Revenue. The Tribunal held that the cited ruling did not dislodge its reasoning or justify a reference. A further contention based on explanatory notes to the Finance Bill was not entertained because it had not been raised before the Tribunal, and new points cannot be introduced for the first time in reference proceedings. The reference application was therefore dismissed.

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Issues: (i) Whether, in view of the decision of the Andhra Pradesh High Court, any referable question of law arose from the Tribunal's earlier order on the availability of Modvat credit where the final product enjoyed exemption. (ii) Whether the contention regarding the applicability of explanatory notes appended to the Finance Bill could be entertained when it had not been raised before the Tribunal.

Issue (i): Whether, in view of the decision of the Andhra Pradesh High Court, any referable question of law arose from the Tribunal's earlier order on the availability of Modvat credit where the final product enjoyed exemption.

Analysis: The order records that the Tribunal had earlier followed its own decisions treating the assessee as entitled to choose between availing exemption on the final product and taking Modvat credit on inputs. The High Court ruling relied upon by the Revenue was considered, but the Tribunal held that the later judgment did not assist the Revenue in establishing a referable question of law against the Tribunal's earlier view. The Tribunal concluded that, on the reasoning of the High Court judgment as understood in context, the assessee's choice between the exemption route and Modvat credit did not create a substantial question warranting reference.

Conclusion: No referable question of law was found on this issue, and the Revenue's request failed.

Issue (ii): Whether the contention regarding the applicability of explanatory notes appended to the Finance Bill could be entertained when it had not been raised before the Tribunal.

Analysis: The Tribunal noted that this point had not been urged at the stage of the appeal before it. A reference application cannot be used to introduce a new factual or legal contention for the first time, and the omission at the original hearing was decisive.

Conclusion: The issue could not be entertained in reference proceedings.

Final Conclusion: The reference application disclosed no merit and was dismissed, leaving the Tribunal's earlier view undisturbed.

Ratio Decidendi: A reference application cannot succeed where no referable question of law arises from the Tribunal's order, and a new contention not raised before the Tribunal cannot be introduced for the first time in reference proceedings.

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