Modvat credit reference failed where the proposed gate-pass question did not arise from the proved facts.

The reference application was held not maintainable because the proposed question of law did not arise from the factual record. The Tribunal noted that the respondent had produced dealer-issued invoices for Modvat credit, and the revenue did not dispute their correctness. In those circumstances, entitlement to credit did not depend solely on endorsed gate passes, so the framed issue about gate passes issued before 1-4-1994 but endorsed later was outside the facts of the case. The application was rejected on that basis.

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Issues: Whether the reference application was maintainable when the proposed question of law did not arise from the facts, and the respondent had also produced invoices issued by dealers for availing Modvat credit.

Analysis: The Tribunal found that the factual record showed the respondent had produced dealer-issued invoices for the purpose of Modvat credit. Since the revenue did not dispute the correctness of those invoices, the entitlement to credit did not turn solely on the endorsed gate passes. On that footing, the proposed legal question regarding gate passes issued before 1-4-1994 but endorsed after that date was not one that arose out of the facts of the case.

Conclusion: The reference application was not maintainable on the question framed and was rejected.

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