1998 (3) TMI 286 - AT - Central Excise

Summary

Issues:
1. Divergence of opinion between different benches of CEGAT on Modvat credit for Wires & Cables under capital goods.
2. Whether the matter should be referred to the Hon'ble High Court due to the conflicting decisions.
3. The correctness of the Appellate Tribunal's decision on the classification of wires and cables as capital goods.

Analysis:

The judgment pertains to a reference petition challenging the Appellate Tribunal's denial of Modvat credit on Wires & Cables under capital goods. The petitioner argued that there was a divergence of opinion between the Bench of the Tribunal and the Hon'ble North Regional Bench (NRB) of CEGAT, as evidenced by various decisions. The petitioner contended that when there are conflicting decisions by different Benches of the Tribunal regarding Modvat credit availability, the matter should be referred to the Hon'ble High Court for resolution, citing relevant case laws such as Rapsir Engineering and Raipur Alloys.

The Respondent informed the Tribunal that a similar matter had already been referred to a Larger Bench for consideration, suggesting that the current petition should be kept in abeyance until the Larger Bench decision. However, the Tribunal noted the existence of a divergence of views on the subject between different benches and the settled legal position that in cases of conflicting opinions on Modvat credit availability, a question of law arises under Rule 57A or Rule 57Q. The Tribunal emphasized that the right of the petitioner to seek a reference to the High Court cannot be denied merely because a similar matter is pending before a Larger Bench.

Consequently, the Tribunal decided to refer the matter to the Hon'ble High Court and formulated specific questions of law for consideration. These questions included the correctness of the Tribunal's decision on the classification of wires and cables as capital goods under Rule 57Q of the Central Excise Rules, 1944, and whether the Tribunal erred in not following relevant legal precedents. Ultimately, the reference application was allowed, indicating that the matter would be taken up by the High Court for resolution.