MODVAT credit on tyre protection chain denied where item did not qualify as capital goods under Rule 57Q.

Tyre protection chain under Heading 73.15 was examined for treatment as capital goods eligible for MODVAT credit under Rule 57Q of the Central Excise Rules, 1944. The court considered whether the item, not used in producing or processing goods or in bringing about any change in a substance for manufacture, and not specifically covered by the relevant clause, could still qualify for credit. It noted that the same issue had already been decided against the Revenue in an earlier reference involving the same assessee and identical facts. The Revenue's challenge was therefore rejected.

---

---

Issues: Whether MODVAT credit on tyre protection chain falling under Heading 73.15 was admissible as capital goods under Rule 57Q of the Central Excise Rules, 1944.

Analysis: The appeal turned on the applicability of the definition of capital goods under Rule 57Q during the relevant period. The question was whether tyre protection chain, not used for producing or processing goods or for bringing about any change in any substance for manufacture of final products and not specifically covered by the relevant sub-clause, could still qualify for MODVAT credit. The Court noted that the issue had already been squarely answered against the Revenue in an earlier reference decision involving the same assessee and identical question.

Conclusion: MODVAT credit was held not to be available to the Revenue's challenge, and the appeal was rejected.

---