Modvat credit on structural items qualifies as capital goods when used for plant supports, but not as mere construction material.

Modvat credit under Rule 57Q was admissible on structural items used to fabricate plant supports and related installations because such goods, when used as components or accessories of plant and machinery, fall within the scope of capital goods. Credit could not be claimed for materials used merely as construction material forming permanent plant structures. Applying the assessee's earlier case, the Tribunal allowed credit on the disputed items generally, but excluded M.S. sections and M.S. shapes. The assessee obtained partial relief accordingly.

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Issues: Whether Modvat credit under Rule 57Q was admissible on structural items used for fabrication of plant supports and related installations, and whether credit could be denied on the disputed items as mere building material.

Analysis: The governing test was whether the goods were used as components or accessories of plant and machinery, or whether they were merely construction material forming part of walls or other permanent structures. Items used to raise structures supporting machines and equipment fall within the scope of capital goods, whereas materials used only in construction of the plant structure do not. Applying the earlier view taken in the assessee's own case, the Tribunal held that the disputed items were generally used in the manner that qualified them as capital goods, except M.S. sections and M.S. shapes.

Conclusion: Modvat credit was admissible on all the disputed items except M.S. sections and M.S. shapes, and the assessee succeeded to that limited extent.

Final Conclusion: The appeal resulted in partial relief, with credit upheld for the disputed items other than M.S. sections and M.S. shapes.

Ratio Decidendi: Structural materials used to support plant machinery and equipment may qualify as capital goods under Rule 57Q, but materials used merely as construction material for permanent plant structures do not.

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