Modvat credit on steel forgings denied where Rule 57Q eligibility failed and a new Rule 57A plea was not entertained.

Modvat credit on steel forgings claimed as capital goods under Rule 57Q was not admissible because the forgings were not among the specified eligible items. A fresh alternative plea that the forgings should be treated as inputs under Rule 57A and protected by Rule 57D(2) could not be entertained at the second appellate stage, since it had not been raised before the lower authorities or in the memorandum of appeal and the other side had no opportunity to meet it. The credit claim therefore failed.

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Issues: Whether Modvat credit on steel forgings was admissible when the credit was claimed under Rule 57Q, and whether a fresh plea based on Rule 57A and Rule 57D(2) could be entertained at the second appellate stage.

Analysis: The plea that the forgings should be treated as inputs under Rule 57A and that credit was protected by Rule 57D(2) had not been raised before the lower authorities or in the memorandum of appeal. A new contention of this kind could not be entertained for the first time in oral submissions at the second stage of appeal, particularly when the other side had no opportunity to meet it. On the merits also, the forgings were not one of the specified items eligible for Modvat credit as capital goods under Rule 57Q.

Conclusion: The credit was not admissible and the challenge failed.

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