Modvat credit referenceability turns on arguable legal questions, while pending similar High Court proceedings do not defeat reference.

A question on whether pre-1-4-1994 gate passes endorsed after that date qualified as eligible documents for Modvat credit under Rule 57A was held fit for reference to the High Court because it was substantive, arguable, and had already been treated as referable in a similar matter. The objection that the reference had to arise from a different order was rejected. By contrast, a proposed question based only on the pendency of an identical issue before the High Courts was declined, since such pendency does not affect the finality or referability of the Tribunal's decision. The reference was therefore allowed only in part.

---

---

Issues: (i) Whether the question whether gate passes issued before 1-4-1994 but endorsed thereafter fell within Entry No. 10 of Notification No. 16/94-C.E. (N.T.) and were eligible documents for Modvat credit under Rule 57A of the Central Excise Rules was fit to be referred to the High Court. (ii) Whether the second question, namely, whether the Tribunal was correct in dismissing the Department's appeal when an identical issue was pending before the High Courts, was referable.

Issue (i): Whether the question whether gate passes issued before 1-4-1994 but endorsed thereafter fell within Entry No. 10 of Notification No. 16/94-C.E. (N.T.) and were eligible documents for Modvat credit under Rule 57A of the Central Excise Rules was fit to be referred to the High Court.

Analysis: The question formulated by the Department was found to be the same as the question earlier treated as arguable in another matter and already referred to the High Court. The reasoning also noted that the present final order had proceeded on the same line of authority and that the reference was not barred merely because the issue had earlier arisen in a similar form. The objection that the reference had to be made only from some other order was rejected.

Conclusion: Yes. The question was held fit for reference to the appropriate High Court, in favour of the Revenue.

Issue (ii): Whether the second question, namely, whether the Tribunal was correct in dismissing the Department's appeal when an identical issue was pending before the High Courts, was referable.

Analysis: The pendency of a similar issue before one or more High Courts was held not to affect the finality or precedential operation of the Tribunal's decision. On that basis, the proposed second question was not accepted as a referable question of law.

Conclusion: No. The second question was declined as not fit for reference, against the Revenue.

Final Conclusion: The reference application succeeded only to the extent of the first question and failed on the second, so the matter was allowed in part and the stated case was directed to be drawn up for reference on the surviving question.

Ratio Decidendi: A question of law can be referred when it is substantive and arguable, but the mere pendency of a similar issue before a High Court does not by itself negate the finality or referability of the Tribunal's decision; each proposed question must be independently tested for reference.

---