Modvat credit on capital goods for a mobile factory was referred to the High Court for authoritative interpretation.

Modvat credit on capital goods used to assemble and install a mobile bulk delivery pumptruck raised a question of legal interpretation because some components appeared to qualify as capital goods, yet credit had been denied on the view that a mobile factory was outside the Central Excise Act, 1944. The fact that the same unit had been treated as a factory for excise registration also created doubt on the correct legal position. In these circumstances, the Tribunal treated the entitlement issue as appropriate for authoritative determination by the High Court and referred the question accordingly.

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Issues: Whether the question concerning entitlement to Modvat credit on capital goods used for assembling and installing a mobile bulk delivery pumptruck required reference to the High Court.

Analysis: The Tribunal's reasoning on the earlier order showed that some components used in the mobile bulk delivery pumptruck could prima facie fall within capital goods, but the credit had been denied on the view that a mobile factory was alien to the Central Excise Act, 1944. The order also noted that the same mobile bulk delivery pumptruck had been treated as a factory for central excise registration purposes, creating a doubt on the correct legal position. In these circumstances, the question whether the appellants were entitled to Modvat credit on capital goods used for assembling and installed in the mobile bulk delivery pumptruck was treated as a fit question for legal interpretation by the High Court.

Conclusion: The question was referred to the High Court for decision.

Ratio Decidendi: Where a substantial doubt arises on the application of Modvat provisions to a mobile factory and the issue is material to entitlement to credit, the appropriate course is to refer the question for authoritative interpretation by the High Court.

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