Modvat credit for plant components and supporting structures was available before the 1995 amendment under Rule 57Q.

For the pre-amendment period under Rule 57Q, ceramic and refractory items and brass tubes used with a boiler qualified as components or accessories of plant and were eligible for Modvat credit as capital goods. Supporting structures such as M.S. angles, channels and sections used as parts of the plant structure were also treated as covered for the period before 16.03.1995. The governing principle applied was that plant includes apparatus used for business, and a direct nexus with the final product was not required. On that basis, denial of credit on the disputed items was unsustainable and credit was allowable.

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Issues: Whether ceramic/refractory items and brass tubes qualified as components and accessories of the boiler and whether supporting structures brought into the factory up to 15.03.1995 were eligible for Modvat credit as capital goods under Rule 57Q.

Analysis: The relevant definition of capital goods under Rule 57Q, as applicable to the material period, covered components and accessories of plant. The ceramic/refractory items and brass tubes were used with the boiler, which was an admitted plant, and therefore they answered the description of eligible components and accessories. As regards supporting structures, the governing principle applied was that plant includes apparatus used for the business and that direct nexus with the final product is not required. On that basis, supporting structures such as M.S. angles, channels and sections used as parts of the plant structure were treated as covered by the expression capital goods for the period prior to 16.03.1995.

Conclusion: The denial of credit on ceramic/refractory items, brass tubes and supporting structures was unsustainable, and Modvat credit was allowable on all the disputed items for the relevant period.

Ratio Decidendi: For the pre-amendment period, items used as components, parts or accessories of plant, including supporting structures integral to the plant, are eligible for Modvat credit under the capital goods definition even without a direct nexus with the final product.

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