Capital goods credit for baling machine depended on when manufacture was complete and the RG 1 stage was reached.

Capital goods credit under Rule 57Q for a baling machine depended on whether manufacture in the factory was complete only after the baling process and the RG 1 stage was reached thereafter. The eligibility question turned on that factual point because, if baling occurred before completion of manufacture, the machine could qualify as equipment used in producing or processing goods. The record did not clearly establish the RG 1 stage, and the relevant register was not produced, so the factual basis for a final determination was incomplete. The matter was therefore remitted for fresh determination of the RG 1 point.

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Issues: Whether capital goods credit under Rule 57Q was available on a baling machine used for baling polyurethane foam products, depending on whether the RG 1 stage in the factory was reached only after the baling process was completed.

Analysis: The availability of credit turned on a factual determination of the point at which manufacture was complete in the assessee's factory. If the RG 1 stage was reached only after baling, the machine would qualify as equipment used for producing or processing goods within the meaning of Rule 57Q. The existing record did not clearly establish the RG 1 stage, and the relevant register was not produced, so the factual basis for a final ruling on eligibility was incomplete.

Conclusion: The question of credit eligibility was not finally decided on merits and was sent back for fresh determination of the RG 1 point.

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