Capital goods credit for structural items supporting pollution control equipment applies under the pre-amendment rule, not later amendments.

Structural items used to fabricate support structures for pollution control equipment were treated as components of plant and, on the relevant pre-amendment text of Rule 57Q(1), qualified as capital goods for Modvat credit. The later amendment to Rule 57Q(1) effective from 1-3-97 could not be applied retrospectively to an earlier period. On that basis, denial of capital goods credit was unsustainable and the demand was set aside.

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Issues: Whether structural items used to fabricate support structures for pollution control equipment qualify for capital goods credit under Explanation (1)(b) to Rule 57Q(1) of the Central Excise Rules, 1944, and whether the amended version of Rule 57Q(1) could govern the prior period.

Analysis: Pollution control equipment was treated as part of plant for the purpose of Explanation (1) to Rule 57Q(1) as it stood on the relevant date. The structural items were used to fabricate supporting structures for such equipment and therefore became part of the plant. Components and parts of plant, machinery and equipment used for the manufacture of final products were covered within the meaning of capital goods for Modvat purposes. The later amendment to Rule 57Q(1) from 1-3-97 could not be applied to a period prior to that date.

Conclusion: The structural items were eligible for capital goods credit under Explanation (1)(b) to Rule 57Q(1) of the Central Excise Rules, 1944, and the contrary denial was unsustainable.

Final Conclusion: The demand was set aside and the appeal succeeded on merits in respect of eligibility to capital goods credit.

Ratio Decidendi: Structural items used to fabricate support structures for pollution control equipment are components of plant and qualify as capital goods under the pre-amendment version of Rule 57Q(1), and a later amendment cannot govern an earlier period.

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