Modvat credit on gear boxes was unavailable before the 16-3-1995 amendment, which did not apply retrospectively.

Rule 57Q, as it stood before 16-3-1995, used a restrictive definition of "capital goods" and did not include a gear box within the specified categories. Modvat credit was therefore not available on a gear box received in the factory in September 1994, because the credit had already been taken before the amendment. Notification No. 11/95-C.E. (N.T.) dated 16-3-1995 was not shown to operate retrospectively, so it did not extend eligibility to goods that were ineligible under the unamended rule.

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Issues: Whether Modvat credit under Rule 57Q of the Central Excise Rules, 1944 was admissible on a gear box received in the factory before 16-3-1995, and whether the amendment introduced by Notification No. 11/95-C.E. (N.T.) dated 16-3-1995 affected such entitlement retrospectively.

Analysis: Prior to 16-3-1995, the definition of "capital goods" under Rule 57Q used the term "means", making the scope specific and restrictive. The definition covered machines, machinery, plant, equipment, apparatus, tools or appliances, their components, spare parts and accessories, and separately moulds and dies, generating sets and weigh-bridges. Gear boxes were not included as capital goods under the unamended provision. The goods had been received in September 1994 and credit had already been taken before the amending notification. The amendment made by Notification No. 11/95-C.E. (N.T.) was not shown to confer retrospective eligibility on goods which were not eligible under the earlier rule.

Conclusion: Modvat credit on the gear box was not admissible for the pre-16-3-1995 period, and the assessee's claim failed.

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