Structural steel for machinery installation is not capital goods for Modvat credit where used as erection material.

Structural steel items used for mounting and installing machinery were treated as erection materials rather than components or accessories of the machinery, so they did not qualify as capital goods for Modvat credit under Rule 57Q. The Tribunal relied on a consistent line of authority that materials used to erect or fabricate machinery are in the nature of building material, not capital goods. On that basis, the claim for Modvat credit was rejected.

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Issues: Whether structural steel items used for mounting and installation of machinery qualify as capital goods for availment of Modvat credit under Rule 57Q of the Central Excise Rules, 1944.

Analysis: The Tribunal noted a consistent line of authority holding that structural materials used for erecting or fabricating machinery are in the nature of building material and not capital goods. The items in question were stated by the appellants themselves to be used in mounting and installation of machinery, which brought them within the same category of erection materials rather than components or accessories of the machinery.

Conclusion: The structural steel items were not eligible for Modvat credit as capital goods and the appeal failed.

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