2002 (9) TMI 474 - AT - Central Excise

Manufacturers win appeal for Modvat credit on conveyor parts as eligible capital goods under Rule 57Q.

The appellate tribunal allowed the manufacturers' appeal regarding Modvat credit on conveyor parts, considering them eligible capital goods under Rule ... Capital goods - Modvat credit - modvatability - components, spares and accessories - Rule 57Q Explanation (1) Clause (a) - Rule 57Q Explanation (1) Clause (d) - CET Heading 84.28Capital goods - Modvat credit - Rule 57Q Explanation (1) Clause (a) - CET Heading 84.28 - components, spares and accessories - Rule 57Q Explanation (1) Clause (d) - Parts of a conveyor used in the appellant's factory since December 1996 qualify as capital goods and are eligible for Modvat credit under the amended Rule 57Q. - HELD THAT: - The Court examined the amendment to Rule 57Q effected w.e.f. 23-7-96. Clause (a) of Explanation (1) brought within the meaning of 'capital goods' all goods falling under Chapter 84 except certain specified headings; Heading 84.28 (conveyors) was not among the excluded headings and therefore conveyors were included as capital goods. Clause (d) of the same Explanation extended the definition to components, spares and accessories of the goods specified in Items (a) to (c). The subject items were admitted to be parts of conveyors in the appellant's pleading (Ground No. 1), and that factual pleading was not challenged. In view of these express provisions, the parts of the conveyor used by the appellants from December 1996 fall within the statutory definition of capital goods and hence were eligible for Modvat credit. The orders of the lower authorities disallowing the credit were thus contrary to the express provision of law and were set aside.Allow the appeal; set aside the findings of the authorities below and hold that the conveyor parts are capital goods eligible for Modvat credit under the amended Rule 57Q.Final Conclusion: The appellate order allows the appeal: parts of the conveyor (Heading 84.28) used by the appellants from December 1996 are capital goods under Rule 57Q (Explanation (1) Clauses (a) and (d)) and entitled to Modvat credit; the contrary orders below are set aside. The appellate tribunal allowed the appeal of the manufacturers of aerated water regarding Modvat credit on conveyor parts, as the parts were considered eligible capital goods under Rule 57Q. The lower authorities' decision disallowing the credit was set aside.