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of <h1>Modvat Credit Denied for Computer & Lighting Arrestor: Not Capital Goods under Rule 57Q</h1> <h3>SHRIRAM VINYL & CHEMICAL INDUS. Versus COMMR. OF C. EX., JAIPUR</h3> In Appeal No. E/2223/2002-NB(S), the Modvat credit claim on a personal computer as capital goods was disallowed due to lack of evidence supporting its use ... Cenvat/Modvat - Modvat on capital goods Issues:1. Availability of Modvat credit on a personal computer as capital goods.2. Entitlement of Modvat credit on a Lighting Arrestor for protecting a transformer against damage due to lightning.Issue 1:In Appeal No. E/2223/2002-NB(S), the dispute revolves around the availability of Modvat credit amounting to Rs. 7,799 on a personal computer claimed by the appellants as capital goods. The authorities disallowed the credit, stating that the personal computer does not meet the definition of 'Capital Goods' under Rule 57Q. The appellants relied on a legal precedent but failed to provide sufficient evidence of the computer's use for pre-determining raw material ratios. The Member (J) upheld the decision, emphasizing that the personal computer was used for record-keeping and did not qualify as 'Capital Goods' per the rule's specifications. The judgment concluded that the impugned order of the Commissioner (Appeals) was valid and upheld.Issue 2:In Appeal No. E/2224/2002-NB(S), the question at hand concerns the entitlement of Modvat credit amounting to Rs. 5,367 for a Lighting Arrestor utilized to protect a transformer from lightning damage. While the adjudicating authority allowed the credit, the Commissioner (Appeals) reversed this decision, asserting that the Lighting Arrestor does not fall within the definition of 'Capital Goods' under Rule 57Q. The Member (J) agreed with the Commissioner (Appeals), stating that the item's purpose was solely to safeguard the transformer and did not meet the criteria for 'Capital Goods.' Reference was made to a legal precedent outlining guidelines for determining such classification. The judgment confirmed the validity of the Commissioner (Appeals)'s order, emphasizing that the Lighting Arrestor did not qualify as 'Capital Goods.' Consequently, both appeals were dismissed based on the discussions and findings presented.
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