2001 (10) TMI 959

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....ent. [Order]. -  The appellant had availed credit of duty paid on One Main Computer in terms of Rule 57Q of the Central Excise Rules, 1944. 2. The credit was denied by the Assistant Commissioner on the grounds that Computer is not included in the definition of capital goods. He also found that the computer system does not perform any function of bringing about change in any subs....

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....he purpose of Modvat Credit under 57Q. Careful reading of Rule 57Q explanation 1(a) clearly reveal that computer system cannot be covered under the said provision for the purpose of Modvat Credit as capital goods. Computer system cannot be treated to be used for processing and producing of the finished product nor for bringing about any change in any manner in the manufacture of finished product. ....

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....omputer system was irregular when the computer system are not capital goods for the purpose of Modvat Credit under 57Q. 4. After hearing both sides and considering the matter it is found :- (a)     Computers are not eligible as held in [2000 (120) E.L.T. 502 (T)] and following the same, credit under Rule 57Q is found to be not eligible. No contravening decision is sh....

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..../designing being the first stage of manufacture of the product is to be supported by material evidence when in the written reply to the SCN it is found that the use has been explained - "will be used mainly for production, planning and monitoring of production including design, drafting......" Thus, the purpose of drawing/design preparation is incidental and not primary. (d)   &n....