Modvat credit for circuit breakers used in transformer control was treated as admissible under capital goods rules.

Circuit breakers used in the main transformer to disconnect and protect the distribution feeder were treated as capital goods for Modvat credit under Rule 57Q. The Tribunal applied its earlier consistent view that circuit breakers used for control of electricity, and for making or breaking circuits, fall within the scope of capital goods. On that basis, credit on the circuit breakers was held admissible.

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Issues: Whether circuit breakers used in the main transformer for disconnecting and protecting the distribution feeder were eligible for Modvat credit as capital goods under Rule 57Q.

Analysis: The Tribunal followed its earlier consistent view that circuit breakers used for control of electricity and for making or breaking circuits fall within the scope of capital goods under Rule 57Q. Applying that settled position, it treated the circuit breakers used in the transformer as eligible for credit.

Conclusion: Modvat credit on the circuit breakers was admissible, and the appeal failed.

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