Modvat credit under Rule 57Q turns on the amended regime and the date of receipt of capital goods, not installation date.

The amended Rule 57Q excluded the relevant chapter heading for Low Frequency Transmission Kit, so it was not eligible as capital goods for Modvat credit. By contrast, Project Import remained eligible for Modvat credit at 100% where the goods were received before 1-3-1997; the date of receipt, not the date of installation, governed the credit entitlement, and the Board's circular supported that view. The result was that credit was denied for the Low Frequency Transmission Kit but allowed in full for the Project Import, giving the assessee only partial relief.

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Issues: (i) whether Low Frequency Transmission Kit was eligible as capital goods for availing Modvat credit under Rule 57Q; (ii) whether Project Import was eligible for Modvat credit to the extent of 100% under Rule 57Q.

Issue (i): whether Low Frequency Transmission Kit was eligible as capital goods for availing Modvat credit under Rule 57Q.

Analysis: The relevant amendment to Rule 57Q, brought into force on 23-7-1996, excluded the chapter heading covering the item. In light of that amendment, the item could not be treated as eligible capital goods for Modvat credit.

Conclusion: The issue was decided against the assessee and in favour of Revenue; Low Frequency Transmission Kit was held not eligible for Modvat credit.

Issue (ii): whether Project Import was eligible for Modvat credit to the extent of 100% under Rule 57Q.

Analysis: Following the earlier decision of the Bench, the amendment restricting credit to 75% did not affect capital goods received prior to 1-3-1997. The date of receipt of the goods was held to be relevant, not the date of installation, and the Board's circular supported that position.

Conclusion: The issue was decided in favour of the assessee; Project Import was held eligible for Modvat credit to the extent of 100%.

Final Conclusion: The appeal succeeded on one issue and failed on the other, resulting in partial relief.

Ratio Decidendi: Eligibility to Modvat credit under Rule 57Q depends on the applicable amendment regime and the relevant date of receipt of capital goods, not the date of installation, where the credit entitlement turns on the amended restriction.

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