Conflicting Tribunal views on deemed Modvat credit create a referable question of law and justify High Court reference.

Conflicting Tribunal decisions on the admissibility of deemed Modvat credit after crossing the prescribed clearance limit showed that the issue was not settled and a referable question of law arose. The Tribunal noted that its earlier view in the matter differed from the later view of a Larger Bench on the same legal question. Because of this divergence, the reference application was held maintainable and was allowed, and the matter was directed to be referred to the High Court for opinion on the admissibility issue.

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Issues: Whether, in view of conflicting Tribunal decisions on the eligibility of deemed Modvat credit after crossing the prescribed clearance limit, a point of law arose for reference to the High Court.

Analysis: The Tribunal noted that its earlier view in the present matter differed from the view subsequently taken by a Larger Bench on the same question. The existence of divergent decisions on the identical legal issue indicated that the matter was not settled and that a referable question of law arose.

Conclusion: A point of law did arise, and the reference application was maintainable and deserved to be allowed in favour of the Revenue.

Final Conclusion: The Tribunal directed reference of the matter to the High Court for an opinion on the question concerning admissibility of deemed Modvat credit after crossing the clearance limit.

Ratio Decidendi: When conflicting decisions of coordinate and Larger Benches exist on the same legal question, the existence of such divergence itself gives rise to a referable question of law.

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