Pipes used only as liquid conduits are not capital goods for Modvat credit under the statutory definition.

Pipes used merely as conduits for transferring liquids between equipment do not qualify as capital goods under Rule 57Q unless they themselves fall within the specified statutory classes or are shown to be components, spares or accessories of the relevant machinery, plant or equipment. Mere use as a channel for movement of liquids does not transform pipes into machinery or accessories that enhance the function of capital goods. Rule 57S governs utilisation of capital goods but does not widen the scope of Rule 57Q. On that basis, Modvat credit is not admissible on such pipes.

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Issues: Whether pipes used only as conduits for transferring liquids from one equipment to another qualify as capital goods, or as components, spares or accessories, for the purpose of Modvat credit under Rule 57Q.

Analysis: The definition of capital goods under Rule 57Q is confined to the specified classes of goods and to their components, spares and accessories. To qualify, the item must itself answer the statutory description or be shown to be a component or accessory of the specified machinery, plant or equipment. Pipes used merely as a direct channel for movement of liquids between machines do not by that use become machinery, plant, equipment, or accessories enhancing the function of such goods. Rule 57S regulates utilisation of capital goods but does not enlarge the scope of Rule 57Q.

Conclusion: The pipes do not qualify as capital goods under Rule 57Q and Modvat credit is not admissible on them, in favour of Revenue.

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