Sufficiency of Modvat declaration under Rule 57G is a question of law when the declaration's scope is disputed.

The sufficiency of a Modvat declaration under Rule 57G was examined where fluoron 11 and fluoron 12 were declared as final products, but credit was claimed on mixtures of those substances. The Tribunal treated the dispute over the scope of the declaration as a question of law, not a pure question of fact, and held that such an issue is referable to the High Court under Section 35G(1) of the Central Excise Act, 1944. It also distinguished authority relied on by the assessee because, in that case, the input had already been specifically declared, whereas here the declaration itself was in issue.

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Issues: Whether the declaration filed under Rule 57G for fluoron 11 and fluoron 12, shown as final products, was sufficient to support Modvat credit on mixtures of fluoron 11 and fluoron 12, and whether the sufficiency of such declaration gave rise to a referable question of law under Section 35G(1) of the Central Excise Act, 1944.

Analysis: The declaration dispute turned on whether the mixtures, though separately classifiable, were covered by the earlier declaration describing fluoron 11 and fluoron 12 as final products. The Tribunal relied on earlier decisions holding that the correctness or sufficiency of a Modvat declaration is a question of law, not merely a question of fact, and that such a question is referable to the High Court. The Tribunal distinguished the assessee's relied-upon authority on the ground that the disputed input there had already been specifically declared, unlike the present case where the scope of the declaration itself was in issue.

Conclusion: The declaration issue was held to raise a question of law, and the question was forwarded for reference to the jurisdictional High Court.

Final Conclusion: The reference application succeeded, and the matter was sent up for authoritative determination on the legal sufficiency of the declaration for Modvat credit.

Ratio Decidendi: The sufficiency of a Modvat declaration under Rule 57G is a question of law referable to the High Court where the scope of the declaration itself is disputed.

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