Modvat credit on in-factory bottle conveyor allowed where capital goods conditions under Rule 57Q were satisfied.

Modvat credit was held admissible on a single liner bottle conveyor used within the factory for moving bottles from the manufacturing section to the packing section. The conveyor fell under Tariff Heading 84.28, and its in-factory use was not disputed. In light of Notification No. 11/95 and the insertion of clause (d) in the definition of capital goods under Rule 57Q, eligibility was tested by reference to the goods specified in clause (a) when used in the factory. That condition was satisfied, so credit was allowed in favour of the assessee.

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Issues: Whether Modvat credit was admissible on the single liner bottle conveyor used in the factory of the manufacturer.

Analysis: The item was classified under Tariff Heading 84.28 and its use in the factory was not in dispute. By Notification No. 11/95, clause (d) was inserted in the definition of capital goods under Rule 57Q, and the admissibility of credit was to be tested with reference to the goods specified in clause (a) when used in the factory. Since the conveyor was used within the factory for moving bottles from the manufacturing section to the packing section, the condition for eligibility was satisfied.

Conclusion: Modvat credit on the single liner bottle conveyor was admissible and the finding was in favour of the assessee.

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