Modvat credit on Front End Loader denied where Chapter 84.29 goods were excluded from capital goods under Rule 57Q.

Modvat credit was not admissible on a Front End Loader classifiable under Chapter Heading 84.29 and used as material handling equipment in the assessee's plant, because the definition of "capital goods" under Rule 57Q, as substituted by Notification No. 14/96-C.E. (N.T.), expressly excluded goods falling under that heading at the relevant time. The earlier broader definition did not govern credit taken on 25-12-1996, so the Revenue's challenge succeeded and credit was denied.

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Issues: Whether Modvat credit was admissible on a Front End Loader falling under Chapter Heading 84.29 under Rule 57Q of the Central Excise Rules, 1944.

Analysis: The item in question was undisputedly classifiable under Chapter Heading 84.29 and was used as a material handling equipment in the assessee's plant. The applicable definition of "capital goods" under Rule 57Q, as substituted by Notification No. 14/96-C.E. (N.T.) dated 23-7-1996, expressly excluded goods falling under Chapter Heading 84.29 at the relevant time. The earlier broader definition did not apply to credit taken on 25-12-1996.

Conclusion: Modvat credit was not admissible on the Front End Loader, and the Revenue's appeal was allowed.

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