Modvat credit for storage tanks turns on Rule 57Q as it stood then, not a later retrospective expansion.

Entitlement to Modvat credit for storage tanks was confined to the express scope of Rule 57Q as it stood during the relevant period. Because the tanks fell under Chapter 73 and that chapter was not then covered as capital goods, credit was not available for March 2000. The later insertion of storage tanks into the capital goods list by Notification No. 6/2001-C.E. (N.T.) operated only from 01.03.2001 and could not be applied retrospectively. The denial of credit was therefore upheld, and the order disallowing Modvat credit remained undisturbed.

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Issues: Whether storage tanks falling under Chapter 73 were eligible capital goods for Modvat credit under Rule 57Q during March 2000, and whether Notification No. 6/2001-C.E. (N.T.) could apply retrospectively.

Analysis: Rule 57Q, as it stood during the relevant period, did not include goods falling under Chapter 73 within the specified category of capital goods for Modvat credit. The tanks in question admittedly fell under Chapter 73. Eligibility had therefore to be tested strictly on the express terms of the rule as it existed at the material time. The later notification inserting storage tanks into the list of capital goods was brought into force only from 01.03.2001 and did not operate retrospectively.

Conclusion: The storage tanks were not eligible capital goods for Modvat credit in March 2000, and the denial of credit was upheld.

Final Conclusion: The appeal failed, and the order disallowing Modvat credit remained undisturbed.

Ratio Decidendi: Entitlement to Modvat credit must be determined by the express contents of Rule 57Q as it stood during the relevant period, and a later notification enlarging the category of capital goods does not apply retrospectively unless so provided.

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