Modvat credit denied for fabrication and repair materials not covered as capital goods under Rule 57Q.

CTD bars, angles, channels, plain plates, hot-rolled plates, joists and HR sheets used for fabrication, structural work and repairs in a plant were treated as outside the scope of capital goods under Rule 57Q. The materials were said to have been fixed at different stations in the plant, but no corroborative evidence established their precise use. Items used for fabrication or construction, and materials used merely to repair damaged parts of capital goods, were not covered by the definition of capital goods. The claimed Modvat credit was therefore not admissible and the disallowance was upheld.

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Issues: Whether CTD bars, angles, channels, plain plates, hot-rolled plates, joists and HR sheets used for fabrication, structural purposes and repair in the plant were eligible for Modvat credit as capital goods.

Analysis: The items were stated to have been fixed at various stations in the plant for fabrication and structural work and for repairing purposes. No corroborative evidence was produced to establish their precise use. Materials used for fabrication or construction were not covered by the definition of capital goods under Rule 57Q, and items used merely for repairing damaged parts of capital goods were also outside that definition.

Conclusion: The items in dispute were not eligible for Modvat credit as capital goods and the disallowance was upheld.

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