Testing equipment in manufacturing can qualify for Rule 57Q credit when used for necessary product completion checks.

Testing apparatus used to check gear-tooth hardness in gear motors was treated as eligible capital equipment under Rule 57Q because it was deployed in the manufacturing stream at a stage necessary for inspection and marketable completion of the goods. The analysis applied a liberal interpretation of Rule 57Q and Section 2(f) of the Central Excise Act, recognising that processes incidental or ancillary to completion of manufactured products can form part of manufacture. On that basis, testing and measuring equipment used for such necessary in-process verification qualified for the benefit.

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Issues: Whether apparatus used for testing the hardness of gear teeth in gear motors was eligible for credit under Rule 57Q.

Analysis: The testing machine was used in relation to goods that had to undergo inspection before being regarded as complete. The scope of manufacture under Section 2(f) of the Central Excise Act, 1944 includes processes incidental or ancillary to completion of the manufactured product, and the admissibility of machinery under Rule 57Q calls for a liberal interpretation. Testing and measuring equipment has been accepted as falling within the benefit where it is used in the manufacturing stream or in a necessary stage connected with marketable completion of the goods.

Conclusion: The testing apparatus was eligible for benefit under Rule 57Q.

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