Capacitors in plant electrical systems qualify as capital goods for Modvat credit when they support the manufacturing process.

Capacitors used in the factory's plant electrical installations were treated as integral parts of the manufacturing system because they regulated voltage and ensured uninterrupted power supply to the process plant. On that basis, they qualified as capital goods eligible for Modvat credit under Rule 57Q of the Central Excise Rules, 1944, and the Revenue's challenge failed.

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Issues: Whether capacitors used in the assessee's factory were eligible for Modvat credit as capital goods under Rule 57Q of the Central Excise Rules, 1944.

Analysis: The relevant precedent treated capacitors used in plant electrical installations as part of the plant and as component parts of the manufacturing system. It was accepted that such items regulate voltage and ensure uninterrupted power supply to the process plant, and therefore serve as integral parts of the plant rather than mere independent electrical accessories.

Conclusion: Capacitors were held eligible for Modvat credit as capital goods under Rule 57Q, and the Revenue's challenge failed.

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