Modvat credit on integrated plant equipment was upheld for conveyor systems, testing machines, measuring instruments and related storage fittings.

Modvat credit under Rule 57Q was considered admissible on conveyor systems, automatic testing machines, measuring instruments, conductive plastic racks and an overhead bridge as capital goods for the period before Notification No. 11/95. The Tribunal's prior view treated items integral to the manufacturing process, including conveyor belts, testing machines and measuring devices used for quantification of raw material, as eligible capital goods. Conductive plastic racks were also treated as part of the conveyor-linked storage system, and the overhead bridge followed the same treatment as part of that system. The amendment by Notification No. 11/95 was not read as restricting the earlier scope of capital goods to exclude these items.

---

---

Issues: Whether modvat credit under Rule 57Q of the Central Excise Rules, 1944 was admissible on conveyor system, automatic testing machines/measuring instruments, conductive plastic racks and overhead bridge as capital goods for the period prior to the amendment by Notification No. 11/95 dated 16.03.1995.

Analysis: The disputed items had already been recognised in Tribunal decisions as eligible capital goods where they were integral to the manufacturing process. Conveyor belts were treated as eligible capital goods, testing machines were held admissible, measuring devices used for quantification of raw material were accepted as capital goods, and overhead bridge, being part of the conveyor system, followed the same treatment. Conductive plastic racks were also treated as storing devices fitted with the conveyor system. The amendment by Notification No. 11/95 did not narrow the earlier scope of the expression capital goods so as to exclude the disputed items.

Conclusion: Modvat credit was admissible on all the disputed items and the Revenue appeal was rejected.

---