Capital goods under Rule 57Q include integral control panels essential to machinery operation, allowing Modvat credit.

A fully automatic control panel used to start and regulate a 150 KW motor in a chemical manufacturing unit was treated as capital goods for Modvat credit purposes under Rule 57Q. The Tribunal held that electrical control panels and similar regulating devices, when integral to the effective functioning of production machinery and necessary for its operation, fall within the scope of Explanation 1(a) to Rule 57Q. As no contrary authority on the specific item was shown, the panel qualified for credit because it supported the machinery's working even though it did not itself produce goods.

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Issues: Whether a fully automatic control panel used for starting and regulating the operation of a 150 KW motor in a chemical manufacturing unit qualifies as capital goods and is eligible for Modvat credit under Rule 57Q.

Analysis: The item was used in the manufacturing set-up to control the starting current of a high-capacity motor and to switch automatically to running mode after startup. The Tribunal followed its earlier view that electrical control panels and similar regulating devices, being essential for the effective working of the machinery used in production, fall within the scope of capital goods under the relevant explanation to Rule 57Q. No contrary authority on the specific item was produced.

Conclusion: The fully automatic control panel is covered by the definition of capital goods under Explanation 1(a) to Rule 57Q and the appellants are entitled to Modvat credit.

Ratio Decidendi: Equipment that is integral to the functioning and effective operation of manufacturing machinery, even if it does not itself directly produce goods, can qualify as capital goods for Modvat credit under Rule 57Q.

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