Modvat credit on tools denied where Rule 57A independently excluded tools from the inputs definition.

Tools were not eligible for Modvat credit as inputs under Rule 57A because the rule contained its own definition of inputs and its Explanation expressly excluded tools during the relevant period. Exclusion from the capital goods category under Rule 57Q did not by itself create eligibility under Rule 57A, since credit entitlement had to be tested independently under that provision. The assessee's claim therefore failed.

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Issues: Whether tools, not covered as capital goods under Rule 57Q, could nevertheless qualify as inputs for Modvat credit under Rule 57A of the Central Excise Rules.

Analysis: The definition of capital goods did not cover tools during the relevant period. The availability of Modvat credit as inputs did not follow automatically from the exclusion of an item from capital goods. Rule 57A had its own definition of inputs, and its Explanation expressly excluded tools from that category at the relevant time. Since eligibility had to be tested within Rule 57A itself, tools could not be treated as inputs merely because they were not capital goods.

Conclusion: Tools were not eligible for Modvat credit as inputs under Rule 57A, and the claim of the assessee failed.

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