Modvat credit for furnace lining materials recognised where refractory cement qualified as capital goods under Rule 57Q.

Refractory cement used to line a furnace was treated as eligible for Modvat credit as capital goods under Rule 57Q. The Tribunal distinguished authorities relating to cement or steel structures used in furnace construction and to goods used only for kiln maintenance, finding those materials factually different from furnace lining. It also noted that credit had already been allowed on the same product in the appellant's earlier cases. On that basis, the product qualified for credit under Rule 57Q and the appellant succeeded.

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Issues: Whether refractory cement used for lining of a furnace was eligible for Modvat credit as capital goods under Rule 57Q of the Central Excise Rules, 1944.

Analysis: The dispute concerned eligibility of Modvat credit on refractory cement. The adverse authorities relied on decisions dealing with cement or steel structure used in construction of a furnace and with goods used for maintenance of a kiln, but those facts were held to be distinguishable because the present product was used for lining the furnace. The Tribunal also noticed that in the appellant's own earlier cases, credit had already been allowed on the same product under Rule 57Q.

Conclusion: Refractory cement used for lining the furnace was held eligible for Modvat credit under Rule 57Q, and the appellant succeeded.

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