Modvat credit on wire and felt used in paper manufacture treated as a referable question of law for High Court consideration.

The Tribunal treated the admissibility of Modvat credit on wire and felt used in paper manufacture under Rule 57A of the Central Excise Rules, 1944 as a referable question of law. Relying on its earlier view on an identical issue and the rival written submissions, it held that the matter raised a point fit for reference to the jurisdictional High Court. The statement of case was accordingly directed to be sent for decision, and the reference application was allowed.

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Issues: Whether the reference application deserved to be allowed and the question of law referred to the jurisdictional High Court on the admissibility of Modvat credit on wire and felt used in the manufacture of paper and paper boards under Rule 57A of the Central Excise Rules, 1944.

Analysis: The Tribunal noted that in an earlier decision on a similar issue it had already held that a point of law arose. In view of that earlier view, and considering the rival written submissions, the Tribunal held that the present matter also involved a referable question of law. The question whether wire and felt used in the manufacture of paper were inputs for purposes of Modvat credit was therefore treated as fit for reference.

Conclusion: The reference application was allowed and the statement of case was directed to be sent to the Hon'ble Punjab & Haryana High Court for decision.

Final Conclusion: The Tribunal accepted that a referable question of law arose and directed reference of the matter to the High Court.

Ratio Decidendi: Where an earlier decision has already recognized that a question of law arises on an identical issue, the Tribunal may treat the subsequent matter as fit for reference to the High Court.

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