Broad Rule 57-Q interpretation allows Modvat credit for a hydraulic mobile crane used in material handling during manufacture.

Rule 57-Q was interpreted broadly to cover equipment that assists the manufacturing process, not only machinery that directly changes goods. Material handling during manufacture was treated as part of manufacture, so a hydraulic mobile crane used to move raw materials and semi-finished goods and to facilitate galvanisation qualified as capital goods. Modvat credit was therefore admissible under Rule 57-Q.

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Issues: Whether a hydraulic mobile crane used for handling raw materials and semi-finished goods in the manufacture of transmission line tower material qualified for Modvat credit under Rule 57-Q.

Analysis: The benefit of Rule 57-Q is not confined to equipment that directly brings about a change in the goods. Goods and equipment that help or assist the manufacturing process also fall within its wider ambit. Material handling during the course of manufacture is part of the manufacturing process. Following the principle that use of power or machinery for handling and shifting materials in manufacture is a manufacturing use, a mobile crane employed for moving raw materials, semi-finished goods and for facilitating galvanisation is covered by the rule.

Conclusion: The hydraulic mobile crane was eligible capital goods under Rule 57-Q and credit was admissible.

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