Capital goods credit denied where Heading 84.18 goods were excluded on the date of availment under Rule 57Q.

Eligibility for Modvat credit under Rule 57Q depended on whether the goods qualified as capital goods on the date credit was taken, not on the date duty was paid or the goods were cleared by the manufacturer. On the date of availment, goods falling under Heading 84.18 were excluded from the definition of capital goods in the Explanation to Rule 57Q(1). As the vapour absorption heat pump fell within that excluded heading, it could not qualify for credit. The credit was therefore held inadmissible, and the order granting credit was set aside with restoration of the original denial.

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Issues: Whether vapour absorption heat pump classifiable under Heading 84.18 was eligible as capital goods for credit under Rule 57Q on the date the credit was taken.

Analysis: Under Rule 57Q, eligibility for credit depended on whether the goods qualified as capital goods on the date credit was taken, not on the date when duty was originally paid or the goods were cleared by the manufacturer. On the date of availment, goods falling under Heading 84.18 were specifically excluded from the definition of capital goods under the Explanation to Rule 57Q(1). As a result, the goods in question could not be treated as capital goods for the purpose of credit.

Conclusion: The credit was not admissible and the order allowing credit was set aside, with restoration of the original denial.

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