Modvat credit on refractory items and clean flow was upheld as admissible inputs under Rule 57A.

Modvat credit was held admissible on magnesia carbon bricks, refractory items and clean flow under Rule 57A because refractory bricks were not excluded by the Explanation to that rule and were treated as inputs. The Tribunal followed its earlier view on refractory bricks and held that credit could not be denied merely because the Department had not accepted that precedent or had sought reference. It also applied its prior decision treating clean flow as an eligible input. Credit was therefore allowed on all the items in question and the Department's challenge failed.

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Issues: Whether Modvat credit was admissible on magnesia carbon bricks, refractory items and clean flow as inputs under Rule 57A.

Analysis: The Tribunal applied its earlier view that refractory bricks were not excluded by the Explanation to Rule 57A and that credit was admissible as input. The finding of the first appellate authority allowing credit on magnesia carbon bricks was based on that earlier decision and was not displaced merely because the Department had not accepted the precedent or had sought reference against it. As regards clean flow, the Tribunal noticed its earlier decision holding the chemical eligible as input for Modvat credit under Rule 57A and followed that view.

Conclusion: Modvat credit was admissible on the items in question and the Department's appeal failed.

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