Consumable process material denied Modvat credit as capital goods, with alternative input claim left unconsidered.

Synthetic wax roller was treated as a consumable used in coating yarn with wax and wholly consumed in use, so it did not qualify as capital goods for Modvat credit under Rule 57Q. The item was not regarded as a component, spare or accessory of the machine, but as material directly used in the manufacturing process. The alternative claim for treatment as an input under Rule 57A was not entertained at the appellate stage, and denial of credit was upheld.

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Issues: Whether synthetic wax roller was eligible for Modvat credit as capital goods under Rule 57Q of the Central Excise Rules, 1944.

Analysis: The item was found to be a consumable used in the process of coating yarn with wax and was wholly consumed in use, requiring replenishment. It was held not to be a component, spare, or accessory of the machine, and instead to be a raw material directly going into the making of the final product. The alternative claim for allowance as an input under Rule 57A was not entertained at the appellate stage.

Conclusion: Synthetic wax roller was not eligible for Modvat credit as capital goods under Rule 57Q, and the denial of credit was upheld against the assessee.

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