Capital goods credit for job-work moulds cannot be denied solely for lack of ownership.

Credit under Rule 57Q could not be denied merely because the manufacturer did not own the capital goods. The applicable rule position, read with the amendment to Rule 57R(3), did not make ownership a necessary condition where moulds were acquired and used in the manufacturing process for job work. As the objection rested only on non-ownership, it failed on the rule as applicable to the period in question. Credit was therefore admissible, and the assessee's claim succeeded.

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Issues: Whether credit under Rule 57Q could be denied on moulds used in job work merely because the manufacturer did not own the capital goods.

Analysis: The denial of credit rested solely on the absence of ownership of the capital goods. The relevant rule position, as explained with reference to the amendment to Rule 57R(3), did not make ownership a necessary condition for taking credit on capital goods acquired and used in the manufacturing process. The moulds were supplied for job work, and the earlier view restricting credit on the ground of ownership could not be sustained on the rule as applicable to the period in question.

Conclusion: The credit was admissible and the objection based on non-ownership failed; the finding was in favour of the assessee.

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