Capital goods eligibility for electrical distribution equipment was referred for judicial determination on a question of law.

A reference application on the maintainability of a legal question was allowed where the Tribunal had to consider whether electric distribution equipment such as transformers, cables, fuses and electric motors used in manufacture qualified as capital goods under Rule 57Q. The Tribunal noted that the same issue was already before the Bombay High Court and that an SLP in a related matter had been admitted by the Supreme Court. On that basis, it held that a question of law arose from its earlier order and referred the question to the Rajasthan High Court for determination, without deciding the substantive eligibility of the equipment.

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Issues: Whether a reference application under Section 35F(1) of the Central Excise Act, 1944 was maintainable on the question whether electric distribution equipment such as transformers, cables, fuses and electric motors used in the manufacture of the final product are capital goods under Rule 57Q of the Central Excise Rules, 1944.

Analysis: The Tribunal noted that an identical issue had already been referred to the Bombay High Court and that the Supreme Court had admitted an SLP in a related matter concerning eligibility of electrical distribution equipment for capital goods credit. On that basis, it found that a question of law did arise from its earlier final order and that reference was warranted.

Conclusion: The reference application was allowed and the stated question of law was referred to the Rajasthan High Court.

Final Conclusion: The Tribunal did not decide the substantive eligibility of the equipment itself, but permitted judicial determination of the legal question by the High Court.

Ratio Decidendi: Where a question of law arises from the Tribunal's order and the issue is already under consideration in similar proceedings, a reference to the High Court is warranted.

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