Modvat credit on starter coil and coils qualified as capital goods under Rule 57Q before the 1995 amendment.

Starter coil and coils were treated as capital goods eligible for Modvat credit under Rule 57Q of the Central Excise Rules even before 16-3-1995. The Tribunal applied the Larger Bench ruling in Jawahar Mills Ltd., which construed capital goods broadly to include machines, plants, tools and appliances used for producing or processing goods for manufacture of the final product. On that interpretation, the later expansion by Notifications No. 11/95-C.E. and 14/96-C.E. was not necessary for such items to qualify. The Revenue's appeal therefore failed.

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Issues: Whether starter coil and coils were eligible for Modvat credit as capital goods under Rule 57Q of the Central Excise Rules prior to 16-3-1995.

Analysis: The dispute turned on the scope of the definition of capital goods under Rule 57Q. The Tribunal relied on the Larger Bench decision in Jawahar Mills Ltd., which held that machines, plants, tools and appliances used for producing or processing goods for manufacture of the final product fell within the ambit of capital goods even before the expansion made by Notification No. 11/95-C.E. dated 16-3-1995 and Notification No. 14/96-C.E. dated 23-7-1996.

Conclusion: Starter coil and coils were eligible for Modvat credit as capital goods even prior to 16-3-1995, and the Revenue's appeal failed.

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