Tariff classification controls Modvat credit eligibility; descriptive remarks in a declaration cannot defeat credit for eligible capital goods.

Modvat credit under Rule 57Q turned on the tariff classification of the capital goods and the specific exclusions in the rule. An H.V. transformer classified under Heading 8504 fell within Chapter 85 and was not among the excluded headings, so it remained eligible for credit. A descriptive reference in the declaration as a spare for a cement mill did not govern entitlement because the declaration could not override the rule. Credit was therefore admissible and the denial was unsustainable.

---

---

Issues: Whether H.V. Transformer falling under Heading 8504 was eligible for Modvat credit under Rule 57Q, notwithstanding its description in the declaration as a spare of cement mill.

Analysis: Under Rule 57Q, eligibility for credit depended on the tariff classification of the capital goods and the exclusions specifically provided in the rule. Goods falling under Chapter 85 were eligible except those specifically excluded. The transformer in question was classified under Heading 8504, which was not one of the excluded headings. The additional description in the declaration did not control entitlement, because the declaration did not confer the benefit and the governing criterion was the rule itself.

Conclusion: The transformer was eligible for Modvat credit under Rule 57Q and the denial of credit was unsustainable.

Final Conclusion: The impugned order was set aside and the appellant was granted the credit relief claimed.

Ratio Decidendi: Where eligibility for Modvat credit is determined by the tariff classification under Rule 57Q, credit cannot be denied on the basis of descriptive remarks in the declaration if the goods fall within an eligible heading and are not specifically excluded.

---