Modvat credit on wires and cables: conflicting Tribunal views preserved the right to seek High Court reference.

Conflicting Tribunal views on Modvat credit for wires and cables as capital goods under Rule 57Q gave rise to a question of law fit for reference. The pendency of a similar issue before a Larger Bench did not extinguish the applicant's statutory right to seek reference of the present questions to the High Court. The reference application was therefore allowed and the questions of law were referred.

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Issues: Whether the reference application was maintainable and whether the questions of law concerning Modvat credit on wires and cables as capital goods under Rule 57Q of the Central Excise Rules, 1944 should be referred to the High Court despite a pending Larger Bench reference.

Analysis: A divergence of view was found between the Tribunal and the North Regional Bench on the availability of Modvat credit on wires and cables. The existence of conflicting Tribunal decisions was treated as giving rise to a question of law fit for reference. The pendency of a similar matter before a Larger Bench did not extinguish the applicant's statutory right to seek reference of the present questions to the High Court.

Conclusion: The reference application was allowed and the questions of law were referred to the High Court.

Ratio Decidendi: Where divergent Tribunal views exist on a question affecting Modvat credit, the statutory right to seek a reference on a question of law is not defeated merely because a similar issue has also been referred to a Larger Bench.

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