MODVAT credit on construction material denied where plates and sheets were used for platforms, not as capital goods.

MODVAT credit under Rule 57-Q of the Central Excise Rules, 1944 was confined to specified capital goods and their components, spares and accessories used in the factory. Plates, sections, sheets and staging material used to construct platforms and other civil structures were not capital goods merely because the supplier's invoices described them otherwise. Their actual use and character controlled, and material employed for erection of a platform did not fall within Chapter 84 machinery or accessories. The credit was therefore inadmissible and had been wrongly availed, with the finding going against the assessee and in favour of Revenue.

---

---

Issues: Whether MODVAT credit was admissible under Rule 57-Q of the Central Excise Rules, 1944 on plates, sections, sheets, staging material and similar items said to have been used in the factory for constructing platforms and supporting machinery.

Analysis: Rule 57-Q allowed credit only on capital goods used in the factory, and the table appended to the rule confined that expression to the specified categories and their components, spares and accessories. The items in question were found to be checkered plates, sections, sheets and staging material used for constructing platforms and other civil structures, not machinery, plant or accessories falling within Chapter 84. The classification shown in the supplier's invoices could not alter the actual user and character of the goods when the material was in substance used for erection of a platform and not as capital goods.

Conclusion: The goods were not capital goods under Rule 57-Q, and the MODVAT credit had been wrongly availed; the finding was against the assessee and in favour of Revenue.

---