Modvat credit on integral boiler components used in manufacture qualifies as capital goods under Rule 57Q.

Modvat credit under Rule 57Q was admissible for an economiser coil treated as an integral part of a boiler used in sugar manufacture. The Tribunal applied an earlier decision on an identical question and held that a boiler, or its integral component, used in a process integrally connected with manufacture and employed for production of the finished product qualifies as capital goods under Rule 57Q. On that reasoning, the Revenue's challenge failed.

---

---

Issues: Whether Modvat credit under Rule 57Q was admissible in respect of the economiser coil as part of the boiler used in the manufacture of sugar.

Analysis: The item in question was found to be an integral part of the boiler. The boiler was used in the manufacturing process, and the issue was held to be covered by an earlier Tribunal decision on an identical question. On that basis, the earlier ratio was applied to the present facts.

Conclusion: Modvat credit under Rule 57Q was admissible. The appeal by the Revenue failed.

Ratio Decidendi: Where a boiler or its integral component is used in a process integrally connected with manufacture and is employed for the ultimate production of the finished product, it qualifies for Modvat credit as capital goods under Rule 57Q.

---