Modvat credit on cutting gases treated as a question of law and referred for authoritative determination.

Modvat credit on oxygen and acetylene gas used to cut scrap into smaller pieces before feeding it into the furnace was treated as a question of law. The Tribunal accepted the Revenue's contention that the issue turned on whether the gases were used in or in relation to the manufacture of the final product. On that basis, the reference applications were allowed and the question was referred to the High Court for authoritative determination.

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Issues: Whether the question of law on admissibility of Modvat credit on oxygen/acetylene gas used for cutting scrap into smaller pieces, before feeding it into the furnace, should be referred to the High Court.

Analysis: The Tribunal treated the admissibility of credit on the disputed input as a question of law arising from the earlier final order. It accepted the Revenue's contention that the issue concerned whether the gases were used in or in relation to the manufacture of the final product and therefore required authoritative determination by the High Court.

Conclusion: The reference applications were allowed and the question of law was referred to the High Court.

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