Modvat credit on capital goods upheld where switch board panel fell within Rule 57Q and binding precedent controlled.

Modvat credit under Rule 57Q of the Central Excise Rules, 1944 depended on whether the goods qualified as capital goods. A Larger Bench ruling had already held that a switch board panel falls within the expression "capital goods", and that binding precedent must be followed by the lower appellate authority while it remains good law. Applying that ruling, the Tribunal treated the issue as settled in favour of the assessee and held the credit admissible on the switch board panel and other covered capital goods.

---

---

Issues: Whether Modvat credit was available on switch board panel and other capital goods under Rule 57Q of the Central Excise Rules, 1944.

Analysis: The availability of Modvat credit depended on whether the goods in question fell within the scope of capital goods under Rule 57Q. The issue was treated as settled by the Larger Bench decision holding that a switch board panel is covered by the expression capital goods. The Tribunal also emphasized that a binding larger bench ruling should be followed by the lower appellate authority so long as it holds the field, and that judicial discipline requires adherence to the precedential hierarchy until the superior court takes a contrary view.

Conclusion: The issue was answered in favour of the assessee. The impugned orders were set aside and Modvat credit was held admissible.

---