Modvat credit on copper conductors used in the factory was admissible as capital goods under the amended Rule 57Q definition.

Copper conductors falling under Heading 85.44 were treated as capital goods for Modvat credit under Rule 57Q for the relevant period, because the amended Explanation inserted by Notification No. 11/95 included goods of that heading when used in the factory. As the use in the factory was undisputed and the amended definition governed the period in question, the Revenue's objection that the goods were not capital goods was rejected. Modvat credit was therefore admissible on the copper conductors.

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Issues: Whether copper conductors falling under Chapter Heading 85.44 were entitled to Modvat credit as capital goods under Rule 57Q for the relevant period.

Analysis: The relevant period was January and February 1998. By Notification No. 11/95 dated 6-3-1995, the definition of capital goods under Rule 57Q had been expanded by an Explanation, and goods falling under Heading 85.44 were included when used in the factory. There was no dispute that the goods were used in the factory, and the Revenue's objection that they were not capital goods was not supported by the amended definition applicable at the relevant time.

Conclusion: The copper conductors qualified as capital goods and the Modvat credit was admissible. The Revenue's appeal failed.

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