Modvat credit exclusion for HDPE bags or sacks justified reference on the legal question arising from the relevant period.

HDPE bags or sacks were specifically excluded from the list of inputs eligible for Modvat credit during the relevant period under Rule 57A. On that basis, the Tribunal held that a question of law arose from the earlier final order and that the matter required reference to the High Court. The reference application was accordingly allowed. The Tribunal did not decide the substantive Modvat-credit entitlement on merits, but treated the statutory exclusion applicable in the relevant period as sufficient to support reference.

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Issues: Whether a reference application should be allowed on the question whether HDPE bags or sacks were eligible inputs for Modvat credit during the period when they were specifically excluded under Rule 57A.

Analysis: The relevant period was after the exclusion clause had come into force, and the items in question were specifically excluded from the list of inputs eligible for Modvat credit. In these circumstances, the Tribunal found that a point of law arose out of the earlier final order and that the matter required reference to the High Court.

Conclusion: The reference application was allowed.

Final Conclusion: The Tribunal did not decide the Modvat-credit entitlement on merits, but concluded that the issue warranted reference because the disputed period fell within the exclusion regime.

Ratio Decidendi: Where the disputed goods are covered by a statutory exclusion applicable during the relevant period, a reference application on the resulting legal question is maintainable and may be allowed.

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