Wide capital goods definition covers kiln refractory castables as furnace spares, allowing credit before the amendment.

Castables used as refractory material in a kiln were treated as a substitute for fire bricks and as spares for the furnace, bringing them within the wide definition of capital goods in Explanation (1) to Rule 57Q. On that basis, they qualified for capital goods credit even for the period before 23-7-1996. The conclusion followed earlier binding precedent on the same provision, which supported a broad construction of capital goods to include materials serving the functional role of furnace or kiln spares.

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Issues: Whether castables used as refractory material were eligible for capital goods credit under Rule 57Q for the period prior to 23-7-1996.

Analysis: The definition of capital goods in Explanation (1) to Rule 57Q was held to be wide. Castables were used as a substitute for fire bricks in the kiln and served to line the surface of the kiln where clinker was manufactured. On that basis, they were treated as spares for the furnace and therefore as capital goods within the scope of clause (a) of the Explanation. The decision followed the view already taken in earlier binding precedent on the same provision.

Conclusion: Castables were eligible for capital goods credit even for the period prior to 23-7-1996, and the Revenue's appeal failed.

Ratio Decidendi: Materials used as spares for a furnace or kiln fall within the wide definition of capital goods under Rule 57Q and qualify for credit even if they are not expressly listed by chapter classification.

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