Modvat credit eligibility for capital goods turned on item-wise classification, with some equipment accepted and others excluded.

Modvat credit under Rule 57Q was examined item-wise for the disputed capital goods. Data logger model, thermo couple, software and blower fans were accepted as eligible capital goods, so credit was admissible for those items. Computer circuit board and display were held not to qualify as capital goods, so credit was denied for those items. The result was partial admissibility of Modvat credit depending on the nature of each item.

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Issues: Whether Modvat credit was admissible under Rule 57Q on the disputed capital goods, namely computer circuit board and display, data logger model and thermo couple and software, and blower fans.

Analysis: The disputed items were examined item-wise for eligibility as capital goods. The Tribunal accepted that data logger model and thermo couple and software, as well as blower fans, were covered as eligible capital goods. However, computer circuit board and display were held not to qualify for credit. The appeal thus succeeded only in part on the question of admissibility of Modvat credit.

Conclusion: Modvat credit was admissible for data logger model and thermo couple and software, and blower fans, but not admissible for computer circuit board and display.

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