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<h1>Appellate Tribunal denies Modvat Credit for tools under Rule 57A</h1> The Appellate Tribunal held that tools were not considered inputs under Rule 57A, thus Modvat Credit was not available for the period in question. The ... Modvat credit under Rule 57A - definition of inputs under Rule 57A (exclusion of tools) - definition of capital goods under Rule 57Q - availability of input credit for toolsModvat credit under Rule 57A - definition of inputs under Rule 57A (exclusion of tools) - definition of capital goods under Rule 57Q - Modvat credit under Rule 57A is not available in respect of tools for the period from 23-7-1996 to 31-8-1996. - HELD THAT: - The Commissioner (Appeals) found that during the relevant period tools were not covered by the definition of capital goods under Rule 57Q either by name or by chapter heading. However, the Court held that tools do not thereby automatically become 'inputs' eligible for Modvat credit under Rule 57A. For an item to qualify as an 'input' it must fall within the definition of inputs in Rule 57A as in force at the relevant time. The Explanation to Rule 57A(1) expressly excluded 'tools' from the definition of inputs during the period in question. Consequently, notwithstanding that tools were not capital goods under Rule 57Q, they remained excluded from inputs under Rule 57A and were not eligible for Modvat credit.The impugned order allowing inputs credit for tools is set aside and Modvat credit under Rule 57A for tools for the stated period is disallowed.Final Conclusion: Revenue's appeal is allowed; the Commissioner (Appeals) order permitting Modvat credit for tools is set aside and such credit is denied for the period from 23-7-1996 to 31-8-1996. The appeal was about Modvat credit for tools from 23-7-1996 to 31-8-1996. The Commissioner (Appeals) allowed inputs credit for tools under Rule 57A, but the Appellate Tribunal disagreed. Tools were not considered inputs under Rule 57A, so Modvat Credit was not available. The appeal of the Revenue was allowed, and the impugned Order was set aside.
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