Modvat credit on bus duct and distribution boards allowed where both items were integral to plant operations and machine functioning.

Modvat credit was considered admissible on bus duct and distribution boards as capital goods. The bus duct was treated as a spare part of the transformer, and the transformer was regarded as an integral part of the plant; that factual finding was not disputed. The distribution boards and panels were found to provide regular electric supply to the machines used in manufacture and to be essential for their functioning; that finding was also not controverted. On those facts, both items were accepted as qualifying capital goods for Modvat credit.

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Issues: Whether Modvat credit was admissible on Bus duct and Distribution Boards as capital goods.

Analysis: The Bus duct were found to be spare parts of the transformer, and the transformer was treated as an integral part of the plant. This factual finding was not disputed. The Distribution Boards and panels were found to be used for regular electric supply to the machines employed in manufacture and to be essential for their working; this finding was also not controverted.

Conclusion: Modvat credit was admissible on both items as capital goods.

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