Express tariff exclusion bars Modvat credit for chilling plant parts, even where the plant is essential for manufacture.

Rule 57Q permitted Modvat credit only on capital goods used in the factory, and goods under Chapter Heading 84.15 were expressly excluded from that definition, so spare parts of a chilling plant classifiable under that heading did not qualify merely because the plant was necessary for manufacture. The alleged misprint in the table to Rule 57Q, referring to 85.18 instead of 84.18, was treated as a printing error and did not alter the exclusion of Heading 84.15. The result was that the exclusion remained operative and credit was unavailable on the disputed goods.

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Issues: (i) Whether spare parts used in erecting chilling plants falling under Chapter Heading 84.15 were eligible for Modvat credit as capital goods under Rule 57Q of the Central Excise Rules, 1944. (ii) Whether the alleged misprint in the table to Rule 57Q, referring to 85.18 instead of 84.18, altered the exclusion of goods under Chapter Heading 84.15 from the ambit of capital goods.

Issue (i): Whether spare parts used in erecting chilling plants falling under Chapter Heading 84.15 were eligible for Modvat credit as capital goods under Rule 57Q of the Central Excise Rules, 1944.

Analysis: Rule 57Q allowed credit only on capital goods used in the factory, and the accompanying table specifically excluded goods under Chapter Heading 84.15 from that definition. The fact that the chilling plant was essential for manufacture did not override the express tariff exclusion. Goods classifiable under the excluded heading could not be treated as capital goods merely because they were functionally necessary for production.

Conclusion: The spare parts of the chilling plant falling under Chapter Heading 84.15 were not eligible for Modvat credit.

Issue (ii): Whether the alleged misprint in the table to Rule 57Q, referring to 85.18 instead of 84.18, altered the exclusion of goods under Chapter Heading 84.15 from the ambit of capital goods.

Analysis: The reference to 85.18 was treated as a printing mistake because the table was dealing with exclusions from Chapter 84, while Chapter 85 was separately dealt with in the next serial number. The alleged misprint did not create any entitlement in favour of the assessee, and the exclusion of Heading 84.15 remained effective. The argument based on 84.18 was therefore untenable.

Conclusion: The alleged misprint did not the assessee and the exclusion of Chapter Heading 84.15 continued to apply.

Final Conclusion: The appeal failed because goods classifiable under the excluded tariff heading could not qualify for Modvat credit, even if they were necessary for the manufacturing process.

Ratio Decidendi: Where a tariff entry expressly excludes a class of goods from the definition of capital goods, Modvat credit cannot be claimed merely on the ground that those goods are essential for manufacture.

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