Modvat credit for packing-material inputs used in carton manufacture raised no fresh question of law for reference.

Modvat credit on paper and board used to make cartons for packing biscuits was treated as use in relation to the manufacture of the final packed product, forming part of an integrated manufacturing process. The reference application proceeded on the rejected premise that Rule 57A allowed credit only on ready-to-use packing materials and not on inputs used to manufacture them. As that distinction was unsupported by the authorities relied upon and did not raise any fresh legal issue, no question of law arose for reference under Section 35G. The reference application was therefore not maintainable.

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Issues: Whether the reference application disclosed any question of law arising from the Tribunal's order on Modvat credit for materials used in making cartons and other packing materials for biscuits.

Analysis: The application proceeded on the premise that Rule 57A permitted credit only on ready-to-use packing materials and not on materials used to make them. That premise had already been rejected in the Tribunal's earlier order and was unsupported by the binding authorities relied upon in the impugned order. The use of paper and board for making cartons used in packing biscuits was treated as part of an integrated process of manufacture and as use in relation to the manufacture of the final packed product. The distinction sought to be drawn from earlier decisions did not raise any fresh legal question warranting reference under Section 35G.

Conclusion: No question of law arose for reference, and the reference application was not maintainable.

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