https://www.taxtmi.com/caselaws?id=98892 Modvat credit under Rule 57Q was available only where the item had a direct, essential and proximate nexus with production or processing of the final product. Goods used merely for repair or maintenance, such as extra equipment and a truing machine, were outside the scope of capital goods and credit was disallowed on those items. Machinery used for crushing coal for boiler feed, maintaining humidity for production, removing impurities during processing, and ensuring uninterrupted water supply to the dye house was treated as capital goods because it supported the manufacturing process directly. Credit was therefore allowed on those items, and the penalty was reduced proportionately. en-us Tue, 04 Apr 2000 00:00:00 +0530 Tue, 24 Jan 2012 14:42:58 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=98892 Modvat credit under Rule 57Q was available only where the item had a direct, essential and proximate nexus with production or processing of the final product. Goods used merely for repair or maintenance, such as extra equipment and a truing machine, were outside the scope of capital goods and credit was disallowed on those items. Machinery used for crushing coal for boiler feed, maintaining humidity for production, removing impurities during processing, and ensuring uninterrupted water supply to the dye house was treated as capital goods because it supported the manufacturing process directly. Credit was therefore allowed on those items, and the penalty was reduced proportionately. Case-Laws Central Excise Tue, 04 Apr 2000 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=98892