Capital goods eligibility under pre-amendment Rule 57Q extends to bus duct as part of machinery, preserving Modvat credit.

Bus Duct used to supply electricity to machinery was treated as an accessory or part of plant and machinery, so it fell within capital goods under the pre-amendment Rule 57Q of the Central Excise Rules, 1944 and qualified for Modvat credit for the relevant period. The later notification relied on by the Revenue did not apply to the earlier dispute period and could not be used to deny the benefit. The pre-existing rule itself covered accessories and parts of plants and machinery, and the contrary view had already been overruled by a Larger Bench decision approved by the Supreme Court.

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Issues: Whether Bus Duct used for supplying electricity to machinery was eligible as capital goods under Rule 57Q of the Central Excise Rules, 1944 for the relevant period prior to 23-07-1996, and whether the later notification affected that position.

Analysis: The finding that the Bus Duct was an accessory or part of the machinery or plant was not challenged. On that footing, the item fell within the definition of capital goods under Rule 57Q as it then stood. The later notification cited by the Revenue did not govern the dispute period and had no bearing on the issue. The pre-existing rule itself covered accessories and parts of plants and machinery, and the contrary view relied on by the Revenue had already been overruled by the Larger Bench ruling approved by the Supreme Court.

Conclusion: The Bus Duct qualified as capital goods under Rule 57Q for the dispute period, and the assessee was entitled to Modvat credit.

Ratio Decidendi: Where an item is found to be an accessory or part of plant and machinery, it is eligible as capital goods under the pre-amendment Rule 57Q, and a later notification cannot be applied to deny that benefit for an earlier period.

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