Capital goods credit for fabrication materials used in a glass furnace chimney was upheld despite immovable equipment concerns.

Steel plain plates used to fabricate the chimney of a glass furnace were held eligible for Modvat/Cenvat credit as capital goods under Rule 57Q because the test was whether the goods were used in or in relation to manufacture. The furnace was treated as eligible capital goods for the relevant period, and materials used in an integral part of that equipment were covered by the credit scheme. The mere fact that the furnace or part of it was immovable did not by itself defeat entitlement where the goods were integrally connected with manufacture; the credit allowed was sustained and the Revenue's challenge failed.

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Issues: Whether steel plain plates used for fabrication of the chimney of a glass furnace were eligible capital goods for availing Modvat/Cenvat credit under the applicable excise law.

Analysis: The credit claim was examined in the light of the statutory definition of capital goods under Rule 57Q of the Central Excise Rules, 1944 and the settled principle that eligibility depends on whether the goods are used in or in relation to the manufacture of the final product. The furnace was treated as eligible capital goods for the relevant period, and the plain plates were used in fabrication of its chimney. The fact that the furnace or part of it was immovable did not by itself defeat credit entitlement where the goods were integrally connected with manufacture.

Conclusion: The steel plain plates qualified for credit as capital goods used in relation to manufacture, and the Revenue's challenge was rejected.

Final Conclusion: The impugned order allowing credit was sustained, and the Revenue's appeal failed.

Ratio Decidendi: Materials used in fabrication of an integral part of eligible manufacturing equipment are entitled to credit where they are used in or in relation to the manufacture of the final product, and immovability of the equipment does not by itself bar such credit.

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