Specific exclusion under capital goods rules prevails over general component entry for Modvat credit claims.

Programmable logic control system classified under Chapter Heading 84.71 was held not eligible for Modvat credit as capital goods under Rule 57Q because it was expressly excluded by Serial No. 2 of the table to the rule. The attempt to treat it as a component or part under Serial No. 5 was rejected, since a specific exclusion cannot be overridden by reliance on a general residual entry for components, spares or accessories. The reasoning was that any contrary inclusion would have required an express legislative provision. The claim for credit was therefore denied and the matter concluded in favour of Revenue.

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Issues: Whether programmable logic control system falling under Chapter Heading No. 84.71 was entitled to Modvat credit as capital goods under Rule 57Q of the Central Excise Rules, 1944.

Analysis: The item was held to be specifically excluded from the purview of capital goods under Serial No. 2 of the table appended to Rule 57Q. The plea that it could nevertheless be treated as a component or part under Serial No. 5 was rejected, since a complete system specifically excluded by the rule could not be brought within a general description so as to defeat the express exclusion. The reasoning proceeded on the basis that if the legislature intended inclusion despite the exclusion, it would have done so expressly.

Conclusion: The claim for Modvat credit was rejected and the appeal failed, in favour of Revenue.

Ratio Decidendi: A specifically excluded item under a capital goods provision cannot be included by resort to a general residual entry for components, spares or accessories.

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