Dust collector attached to manufacturing machine qualifies as capital goods, making Modvat credit admissible.

A dust collector attached to a double spindle buffing machine was treated as capital goods for Modvat credit under Rule 57Q because it operated in conjunction with the machine and collected dust generated in the manufacturing process. The undisputed factual position was that the equipment was physically attached to the machine and used during buffing and polishing of dials. As capital goods for the relevant period included plant, machinery and parts used in manufacture or processing, the dust collector was regarded as part of the machine and satisfied the statutory requirement. Modvat credit was therefore admissible and the Revenue's challenge failed.

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Issues: Whether the dust collector attached to the double spindle buffing machine was eligible for Modvat credit as capital goods under Rule 57Q of the Central Excise Rules.

Analysis: The dust collector was used in conjunction with the double spindle buffing machine for buffing and polishing dials, and it collected the dust generated during that process. The factual position that the dust collector was attached to the machine and was used in the manufacturing process was not disputed. Since capital goods for the relevant period covered plant, machinery and parts used in the manufacture of the final product or in processing, the dust collector, being part of the machine, satisfied the requirement.

Conclusion: The dust collector qualified as capital goods and Modvat credit was admissible; the Revenue's appeal failed.

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