Modvat credit for refractory lining goods upheld where settled precedent supported eligibility under the scheme.

Refractory bricks and refractory goods used to line a furnace in the manufacture of continuous cast iron bars were treated as eligible for Modvat credit. The analysis notes that prior Tribunal and High Court precedent had accepted similar material as qualifying, and that earlier Tribunal views allowed the goods under Rule 57A while later views treated refractory bricks as capital goods under Rule 57Q. The decisive point was entitlement to Modvat benefit itself, so the precise provision under which credit was granted did not defeat the claim. The assessee was therefore entitled to credit.

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Issues: Whether refractory bricks and refractory goods used for lining the furnace in the manufacture of continuous cast iron bars were entitled to Modvat credit.

Analysis: The dispute turned on the eligibility of the goods for Modvat benefit, with prior decisions of the Tribunal and the High Court treating similar material as eligible. The order also noted that earlier Tribunal views had allowed the goods under Rule 57A, while later views treated refractory bricks as capital goods under Rule 57Q. Since the assessee's entitlement to Modvat was the substantive question, the precise route of allowance did not alter the entitlement.

Conclusion: The goods were entitled to Modvat credit and the issue was decided in favour of the assessee.

Ratio Decidendi: Where the relevant inputs or goods are covered by settled precedent for Modvat benefit, the assessee's entitlement is not defeated merely because the benefit may alternatively fall under one provision or another of the Modvat scheme.

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