Capital goods under Rule 57Q include steel tubes, pipes and refractories before amendment, preserving modvat credit eligibility.

Steel tubes, pipes and refractories were treated as capital goods under Rule 57Q of the Central Excise Rules, 1944 even before the 23.7.1996 amendment, because they already fell within the existing clauses of Explanation I. The later insertion of additional clauses (f) and (g) did not confine capital-goods status to goods covered only from the amendment date. On that construction, modvat credit on such goods remained admissible, and the timing of purchase or use before the amendment did not defeat eligibility where the goods were already within the rule.

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Issues: Whether steel tubes, pipes and refractories were covered as capital goods under Rule 57Q of the Central Excise Rules, 1944 prior to the amendment dated 23.7.1996, and whether modvat credit taken on such goods was admissible.

Analysis: The Commissioner (Appeals) and the Tribunal had concurrently held that the goods in question fell within clauses (a), (b) and (c) of Explanation I to Rule 57Q even before the amendment, and that the later addition of clauses (f) and (g) did not mean that steel tubes, pipes and refractories became capital goods only from 23.7.1996. On that construction, the timing of purchase or incorporation prior to the amendment did not defeat eligibility to credit, since the goods were already covered by the existing definition of capital goods.

Conclusion: The claim to modvat credit on the goods was upheld and the Revenue's challenge failed.

Final Conclusion: The appeal was found to be without merit and no interference was called for with the order granting credit.

Ratio Decidendi: Where the existing definition of capital goods already encompasses the goods in question, a later amendment enlarging the enumeration does not restrict credit for goods covered by the earlier language of the rule.

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