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of <h1>Appellants granted Modvat credit for furnace materials as 'accessories' under Rule 57Q</h1> <h3>BHUSHAN STEEL AND STRIPS LTD. Versus COMMISSIONER OF C. EX., MEERUT</h3> BHUSHAN STEEL AND STRIPS LTD. Versus COMMISSIONER OF C. EX., MEERUT - 2000 (126) E.L.T. 915 (Tribunal) Issues:Claim for Modvat credit under Rule 57Q for specific materials used in furnace maintenance denied by lower authorities.Analysis:The Appellants claimed Modvat credit under Rule 57Q for various materials used in furnace maintenance, which was denied by the Assistant Commissioner and upheld by the Commissioner. The denial was based on the argument that the materials were refractory items used for maintenance and not for altering the material under process. The dispute arose as the goods were classified under different chapter headings than refractory bricks, which were considered admissible inputs. The appeal challenged this denial of Modvat credit.The Appellant's Counsel cited precedents where refractories and lining materials were considered permissible inputs under Rule 57Q. They also referred to a Ministry circular clarifying that the benefit of components, spares, and accessories extended beyond specific chapters. The Revenue, represented by the DR, relied on a notification covering refractory materials under a specific heading and a Tribunal decision denying Modvat credit for similar building materials in a different case.The Tribunal analyzed the submissions and the Ministry's clarification, emphasizing that goods falling under specific clauses of the explanation should be allowed for Modvat credit. The judgment discussed the concept of 'accessories' based on previous case law and commercial definitions, highlighting their role in enhancing machinery effectiveness without changing basic functions.It was argued that the furnace and related materials played a crucial role in subjecting materials to intense heat and maintaining efficiency. The Tribunal noted that the materials used were essential for maintaining and enhancing machinery function, qualifying as 'accessories' under Rule 57Q. The judgment distinguished previous cases where materials were used for construction of plant, which did not apply in this scenario. Consequently, the appeal was allowed, granting the Appellants the benefit of Modvat credit for the materials in question.
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