Modvat credit on parts, components and accessories used with capital goods was treated as admissible under Rule 57Q.

Modvat credit under Rule 57Q was treated as admissible on parts, components and accessories used with capital goods. The Board's clarificatory circular was read as removing any distinction between such items and supporting credit eligibility, so the appellate allowance of credit was considered justified. The assessee therefore succeeded on the question of admissibility of credit for these items used with capital goods.

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Issues: Whether Modvat credit under Rule 57Q was admissible on parts, components and accessories used with capital goods.

Analysis: The dispute turned on the scope of Rule 57Q and the effect of the Board's clarificatory circular. The circular was treated as clarifying that no distinction was warranted for parts, components and accessories used with capital goods. In view of that clarification, the allowance of Modvat credit by the appellate authority was found to be justified.

Conclusion: Modvat credit on parts, components and accessories used with capital goods was held to be admissible, and the assessee succeeded.

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