Modvat credit on structural items used for machinery support was upheld for having a direct functional nexus with manufacture.

Modvat credit under Rule 57Q was held admissible on structural items such as M.S. angles, sheets, plates, channels, pipes and tubes used to support machinery and ensure its functioning in manufacture. The Tribunal's factual finding that these items had a direct functional nexus with the plant and machinery was accepted, and the settled principle applied that goods used within the factory for the working of manufacturing equipment can qualify for credit. As the claim depended on those factual findings and existing precedent, no substantial question of law arose, and the challenge failed.

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Issues: Whether Modvat credit under Rule 57Q of the Central Excise Rules, 1944 was admissible on structural items such as M.S. angles, sheets, plates, channels, pipes and tubes used for supporting machinery and ensuring its functioning in the manufacture of final products.

Analysis: The Tribunal had found as a fact that the disputed items were structural components for machinery and were directly linked with the machinery used for production. The Court applied the settled principle that items having a functional nexus with the manufacturing process, including goods used within the factory for the working of plant and machinery, can qualify for credit. In view of those factual findings and the existing precedent recognizing credit on goods so used, no substantial question of law arose.

Conclusion: Modvat credit was admissible and the challenge to the Tribunal's order failed.

Ratio Decidendi: Where goods are used as structural supports or components having a direct functional nexus with machinery employed in manufacture, Modvat credit cannot be denied merely because the goods are not themselves part of the final product.

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