Modvat credit on refractory bricks denied as they formed part of furnace structure, not inputs for manufacture.

Refractory bricks used to line a furnace were not eligible for Modvat credit as inputs under Rule 57A for the period before 1-3-1994 because they formed part of the furnace structure and were not used as inputs in relation to manufacture of the notified products. The allowance for ramming mass could not be extended to refractory bricks merely because both were used with the furnace. Items constituting plant and machinery, or their parts, were outside the scope of inputs under Rule 57A, and credit under Rule 57Q arose only from 1-3-1994 when capital goods provisions were introduced. Modvat credit was therefore not admissible for the earlier period.

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Issues: Whether refractory bricks used for lining a furnace were eligible for Modvat credit as inputs under Rule 57A of the Central Excise Rules for the period prior to 1-3-1994.

Analysis: The benefit allowed in respect of ramming mass could not be extended to refractory bricks merely because both were used in connection with the furnace. Refractory bricks formed part of the furnace structure and were not used as inputs in relation to the manufacture of the notified products. Items constituting plant and machinery, or parts thereof, stood excluded from the scope of inputs under Rule 57A. Credit under Rule 57Q was available only from 1-3-1994 when capital goods provisions were introduced.

Conclusion: Modvat credit on refractory bricks prior to 1-3-1994 was not admissible.

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