Capital goods credit under Rule 57Q upheld for HPLC equipment and related components used in bulk drug manufacture.

Capital goods credit under Rule 57Q was held admissible for an HPLC column used in chromatography, parts of HPLC, and a Multipurpose Electronic Platform because the items were used in the manufacture of bulk drugs. Applying a broad construction of capital goods, the text states that machinery, plant, tools and appliances used for producing or processing goods, or for bringing about a change in any substance for manufacture, fall within the rule. On that basis, the HPLC column and Multipurpose Electronic Platform qualified as items used in manufacture, and the HPLC parts were covered as components; the disallowance was set aside.

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Issues: Whether capital goods credit under Rule 57Q of the Central Excise Rules was admissible for HPLC column for chromatography, parts of HPLC, and Multipurpose Electronic Platform.

Analysis: The use of the three items showed that they were employed in the manufacture of bulk drugs. The larger bench rulings applied a broad construction of capital goods, holding that machinery, plant, tools and appliances used for producing or processing goods, or for bringing about a change in any substance for manufacture, are covered. On that basis, HPLC column for chromatography and the Multipurpose Electronic Platform satisfied the requirement of use in manufacture, and the parts of HPLC were also covered as components.

Conclusion: The items were held eligible for capital goods credit under Rule 57Q, and the disallowance was set aside.

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