Modvat credit for trolley equipment upheld on capital goods classification under the excise tariff.

Flip trolleys and pin trolleys were examined for eligibility to Modvat credit as capital goods under Rule 57Q. The Revenue argued that the goods fell under Chapter 87 and were outside the capital goods definition, while the assessee relied on the manufacturer's classification under Heading 7326.90 and duty payment on that basis. On that classification, the trolleys were treated as capital goods, and denial of Modvat credit was not accepted.

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Issues: Whether Flip Trolley/Pin Trolley was eligible for Modvat credit as capital goods under Rule 57Q.

Analysis: The Revenue contended that the trolleys fell under Chapter 87 of the Central Excise Tariff Act, 1985 and were therefore outside the scope of capital goods under Rule 57Q of the Central Excise Rules. The respondent relied on the manufacturer's classification lists showing the goods under Heading 7326.90, with duty paid on that basis, and that heading was within the capital goods definition.

Conclusion: The trolleys were held to fall within the capital goods category, and the denial of Modvat credit was not accepted.

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