Referable question of law under Modvat rules rejected where declaration timing and capital goods issues were fact-bound.

The proposed Revenue questions were found not to raise a referable question of law because they were either outside the controversy actually decided or depended on factual application of settled Modvat rules. The dispute concerned whether a DG set qualified as capital goods and whether the Modvat declaration had to be filed before the controversy was resolved; the record showed the declaration was filed after settlement of the dispute but within the period permitted by the rules. As no misinterpretation of the rules was shown, the reference application was rejected.

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Issues: Whether the questions proposed by Revenue arising from the Tribunal's order gave rise to a referable question of law for consideration by the High Court.

Analysis: The dispute turned on whether the DG set was capital goods and whether the declaration for Modvat credit was required to be filed before the controversy was resolved. The record showed that the assessee filed the declaration after the dispute was settled and within the period contemplated by the rules. On that footing, the first proposed question was held to be outside the controversy actually decided, and the second question was treated as depending on the factual application of the rules already interpreted in earlier decisions. No misinterpretation of the rules was found.

Conclusion: The proposed questions were held not to be referable questions of law, and the reference application was rejected.

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