Modvat credit eligibility turns on factual use of inputs; broad "used in relation to" wording raised no referable question of law.

Eligibility for Modvat credit under Rule 57A depended on whether each item was in fact used in relation to manufacture. The expression "used in relation to" was treated as broad enough to include items not directly used in the manufacturing process but contributing to it. Because the answer turned on factual appreciation of the use of each item in plant and machinery, no independent question of law arose from the reference applications. The reference applications were therefore rejected.

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Issues: Whether the reference applications raised any question of law on the eligibility of certain items as inputs for Modvat credit under Rule 57A of the Central Excise Rules, 1944.

Analysis: The use of a particular item in plant and machinery was held to be essentially a question of fact. The phrase "used in relation to" in Rule 57A was treated as wide enough to cover items not directly used in manufacture but contributing to the manufacturing process. Since eligibility depended on appreciation of the facts of each item, no independent question of law arose from the reference applications.

Conclusion: No question of law was involved, and the reference applications were rejected.

Ratio Decidendi: Where eligibility for Modvat credit turns on the factual use of an item and the statutory expression "used in relation to" is broad enough to include items contributing to manufacture, the matter is one of fact and does not give rise to a referable question of law.

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