Deemed Modvat credit on used machinery parts turned on factual recognition of non-duty-paid goods, not a referable question of law.

Availability of deemed Modvat credit on old, used and broken aluminium and other machinery parts depended on whether the goods were clearly recognisable as non-duty paid under the Government order issued under Rule 57G(2) of the Central Excise Rules. The Tribunal treated that determination as one requiring verification of materials, enquiry into surrounding facts, and appreciation of evidence rather than resolution of an abstract legal principle. The reference applications were therefore rejected because the issue was confined to fact and no referable question of law arose.

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Issues: Whether the question relating to availability of deemed Modvat credit on old and used broken aluminium and other machinery parts raised a referable question of law, or was confined to appreciation of facts and evidence.

Analysis: The reference applications arose from Tribunal orders concerning deemed credit under the Government order issued under Rule 57G(2) of the Central Excise Rules. The decisive condition was whether the goods were clearly recognisable as non-duty paid. The materials and documents had been produced, and the matter required verification, enquiry, and assessment of the surrounding facts. The determination whether the goods answered the description of being clearly recognisable as non-duty paid was therefore dependent on factual inquiry and appreciation of evidence, not on the formulation of any abstract legal principle.

Conclusion: The issue was held to be one of fact, no point of law arose, and the reference applications were rejected.

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