Modvat credit on capital goods was allowed for a spectrometer, transformer and electric control panel used in manufacture.

Modvat credit under Rule 57Q was held admissible on a spectrometer, transformer and electric control panel as capital goods used in relation to manufacture. The spectrometer, used to measure wavelength and determine hardness and molecular composition of steel, was treated as a testing and measuring instrument qualifying for credit. The transformer, which regulated electricity supply to individual machines, was regarded as goods used for producing or processing excisable goods. The electric control panel, containing switches, fuses and circuit breakers for electrical circuits, was covered by the same capital goods principle applied under the Tribunal's larger bench ruling. Credit was therefore allowed on all three items.

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Issues: Whether Modvat credit was admissible under Rule 57Q on a spectrometer, transformer, and electric control panel as capital goods used in relation to manufacture.

Analysis: The spectrometer was used for measuring wavelength and determining hardness and molecular composition of the steel, and testing and measuring instruments had been treated as capital goods eligible for credit. The transformer regulated supply of electricity for individual machines and was held to fall within the concept of goods used for producing or processing excisable goods. The electric control panel, containing switches, fuses, and circuit breakers for electrical circuits, was also covered by the same principle applied to capital goods under the Tribunal's larger bench ruling relied upon in the order.

Conclusion: Modvat credit was admissible on all three items, namely the spectrometer, transformer, and electric control panel, and the assessee succeeded.

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