Modvat credit on air-conditioning equipment excluded from specified capital goods was not admissible after the rule change.

Air-conditioning machinery and appliances falling under Heading 84.15 were excluded from the list of specified capital goods eligible for Modvat credit under Rule 57Q with effect from 23.07.1996. Goods received after that exclusion could not qualify for credit on the basis of their use in relation to manufacture, so Modvat credit on the air-conditioners was not admissible.

---

---

Issues: Whether Modvat credit was admissible on air-conditioning machinery and appliances received after their exclusion from the list of specified capital goods under Rule 57Q.

Analysis: With effect from 23.07.1996, Notification No. 14/96-C.E. (N.T.) excluded air-conditioning machinery and appliances falling under Heading 84.15 from the specified capital goods eligible for Modvat credit under Rule 57Q. The goods in question were received after that exclusion came into force, so the earlier reasoning based on their use in relation to manufacture could not sustain the claim for credit.

Conclusion: Modvat credit on the air-conditioners was not admissible and the Revenue's objection succeeded.

---