Modvat credit on repair and lining materials denied where items were not themselves plant, machinery, or equipment used in manufacture.

Unsaturated polyester resin and glass fibres used for lining and periodic reinforcement of wash tanks were not capital goods for Modvat purposes because they did not themselves constitute machinery, plant, equipment, apparatus, tools or appliances used in production or processing. The items were treated as materials used for repair and maintenance of the tanks, rather than as eligible manufacturing equipment. On that basis, Modvat credit was denied, and the rejection of the claim was upheld.

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Issues: Whether unsaturated polyester resin and glass fibres used in lining and reinforcement of wash tanks were capital goods eligible for Modvat credit.

Analysis: The claimed goods were used for lining and periodic reinforcement of wash tanks and did not themselves constitute machine, machinery, plant, equipment, apparatus, tools or appliances used in the production or processing of goods. The items were treated as materials used for repair and maintenance rather than capital goods forming part of the eligible manufacturing equipment.

Conclusion: The denial of Modvat credit was upheld and the appeal was rejected.

Final Conclusion: The disputed materials were held not to qualify as capital goods for Modvat purposes, so the Revenue succeeded.

Ratio Decidendi: Materials used for lining or repair of plant and tanks do not become capital goods unless they themselves fall within the class of plant, machinery, equipment or similar items used in manufacture.

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