Modvat credit on refractory bricks for furnace repair was upheld because parts of capital goods fall within a broad Rule 57Q definition.

Refractory bricks used to repair and construct a furnace were treated as parts of capital goods employed in manufacture, and the broad wording of Rule 57Q was held to cover machines, machinery, plant, equipment, and their components, spares and accessories. Credit could not be denied merely because the furnace was fixed at site or not separately classifiable as dutiable goods, since the rule contained no express exclusion for such parts. The bricks therefore qualified for Modvat credit as capital goods, and the denial of credit was set aside.

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Issues: Whether refractory bricks used for repairing and constructing a furnace, being parts of machinery used in manufacture, were eligible for Modvat credit as capital goods under the Central Excise Rules.

Analysis: The definition of capital goods under Rule 57Q was treated as wide enough to include machines, machinery, plant, equipment and their components, spares and accessories. Credit could not be denied merely because the furnace itself was fixed at site or not separately classifiable as dutiable goods. Where the goods in question formed part of capital goods used in manufacturing, and the rule contained no express exclusion for such parts, the benefit of credit could not be refused on the ground that the main machinery was immovable or not independently dutiable.

Conclusion: The refractory bricks formed part of capital goods and were eligible for Modvat credit under Rule 57Q.

Final Conclusion: The assessee was held entitled to credit on the refractory bricks, and the denial of credit was set aside.

Ratio Decidendi: Credit on parts or components of capital goods cannot be denied merely because the main equipment is immovable or not independently dutiable, where the governing rule broadly includes such parts and contains no express exclusion.

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