Rule 57Q credit denied for materials meant to become crane components before any machine existed

Credit under Rule 57Q of the Central Excise Rules, 1944 was confined to capital goods and to existing components, spares, parts or accessories of such goods. Channels, angles and threaded bars received for use in an electric overhead travelling crane were not admissible as Rule 57Q credit because no crane existed in the factory when the goods were received, and articles intended to become components in future could not be treated as components at that stage. The goods might have qualified as inputs for manufacture under Rule 57A, but that was not the basis of the claim. The credit claim therefore failed.

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Issues: Whether credit under Rule 57Q of the Central Excise Rules, 1944 was admissible on channels, angles and threaded bars claimed as components or accessories of an electric overhead travelling crane proposed to be manufactured in the factory.

Analysis: Credit under Rule 57Q was available for capital goods and for existing components, spares, parts or accessories of such goods. Although a crane could qualify as capital goods, the goods in question were received before any crane existed in the factory. Since a component must form part of an existing machine, articles intended to become components in future could not be treated as components when received. The goods might have been inputs for manufacture of the crane and could have attracted credit under Rule 57A, but that was not the basis on which the claim was made.

Conclusion: Credit under Rule 57Q was not admissible and the claim failed.

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