Capital goods eligibility under Modvat credit extended to refractory bricks, conveyor belts and through flow mixers

Refractory bricks were treated as inputs used in the manufacture of final products on the basis of existing High Court authority, while conveyor belts were regarded as material handling equipment essential to the manufacturing process and therefore within capital goods. Through flow mixers were treated as pollution control equipment, and controlling precedent had already recognised such equipment as capital goods eligible for Modvat credit under Rule 57Q of the Central Excise Rules, 1944. Because these questions were already settled by binding judicial decisions and no contrary view was shown, the reference application was rejected.

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Issues: Whether refractory bricks, conveyor belt and through flow mixer were capital goods eligible for Modvat credit under Rule 57Q of the Central Excise Rules, 1944.

Analysis: Refractory bricks were treated as inputs used in the manufacture of final products on the basis of existing High Court authority. Conveyor belt was treated as material handling equipment essential in the process of manufacture, and therefore falling within capital goods. Through flow mixer was treated as pollution control equipment, and the controlling precedent had already held such equipment to be capital goods eligible for Modvat credit. As the relevant questions had already been settled by binding judicial decisions and no contrary view had been shown, the reference was not required.

Conclusion: The items were held to be eligible capital goods for Modvat credit under Rule 57Q, and the reference application was rejected.

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