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If there was a fault to earth the casing of the appliance would remain live otherwise. Also there could be a large current from live to earth which could heat the wires to the extent that your house burns down. This is expensive!
Neutral is near earth potential anyway.
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The fuse should be the first device in any circuit. When a fault occurs the potential across the circuit should become zero to ground. If the fuse was located on the downstream side of the load it would still open the circuit but every part of the circuit upstream from the load would still have a voltage potential to ground. Any one working on the circuit upstream from the load has the potential to receive a shock even though the fuse has opened the circuit. So to answer the question the placement of the fuse in a circuit is for safety reasons.
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