Modvat credit reference allowed where an identical question was already pending before the High Court

A reference application under Section 35G was allowed because the same Modvat credit question on insulated copper cables and wires under Rule 57Q had already been referred to the High Court in an identical matter. The tribunal treated the present controversy as raising the same question of law and directed reference to the High Court, without reopening the merits of the capital goods eligibility issue. The operative effect was that the existing controversy was carried forward for High Court determination rather than decided afresh at this stage.

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Issues: Whether the reference application under Section 35G was liable to be allowed for referring the questions of law to the High Court where the same controversy had already been referred in an identical matter.

Analysis: The entitlement of insulated copper cables and wires to Modvat credit under Rule 57Q had been dealt with in the earlier Nova Udyog matter, and the order under challenge had followed that view. Since the same issue was already the subject of a reference to the High Court in that case, the present reference was treated as raising an identical question warranting the same course. The decision on merits of the capital goods issue was not re-opened in this proceeding; only the propriety of reference was considered.

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

Final Conclusion: The proceeding resulted in a reference to the High Court on an identical question already pending in another matter, without any fresh determination on the underlying Modvat eligibility controversy.

Ratio Decidendi: Where the same question of law arising under the Modvat regime is already referred in an identical matter, the reference application may be allowed and the issue sent to the High Court for decision.

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