Capital goods eligibility for Modvat credit fails where the rule's explanation expressly excludes the disputed goods.

Squirrel jet nozzles were held not to qualify as capital goods for Modvat credit under Rule 57Q(1) because the explanation to Rule 57Q(1)(a) excluded them from the capital goods definition. The adjudicating and appellate authorities' concurrent findings were accepted, and no illegality or invalidity in those findings was shown. As a result, the denial of Modvat credit was upheld.

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Issues: Whether Squirrel Jet Nozzles were eligible as capital goods for the purpose of Modvat credit under Rule 57Q(1) of the Central Excise Rules.

Analysis: The disputed goods were claimed as capital goods for Modvat credit, but the adjudicating authority and the appellate authority found that they did not fall within the definition of capital goods under Rule 57Q(1). The explanation appended to Rule 57Q(1)(a) specifically excluded the goods from the scope of capital goods, and no illegality or invalidity was shown in the concurrent findings.

Conclusion: The goods were not eligible as capital goods and the denial of Modvat credit was upheld.

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