2005 (9) TMI 376

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..... id on the capital goods used by the manufacturer in his factory and enabled him to utilise the credit towards the payment of duty of excise leviable on his final products. During the aforesaid period, the term "capital goods" had the following meaning [vide Explanation I to sub-rule (1) of Rule 57Q] : "Explanation :- For the purposes of this section, - (1) "capital goods" means - (a)     machines, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final products; (b)     components, spare parts and accessories of the aforesaid machines, machinery, plant, equipment, appara .....

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..... ;   Refractory bricks 22.     SS flexible hose 23.     MS plated wire guard 24.     Monometer In respect of all the above items, barring item No. 23, ld. Counsel has cited decisions holding the items to be capital goods eligible for Modvat credit under Rule 57Q. Most of these items were used as "accessories" to Diesel Generating sets in the captive power plant in the respondent's factory. As the DG sets were covered by Clause (a) of Explanation I ibid, their "accessories" were covered by Clause (b) of the said Explanation. Thus, all the said items were eligible for capital goods credit. The appellant has prayed for a remand of the matter to the lower authority for fre .....

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..... y and, therefore, these items qualify to be eligible for capital goods credit in terms of Clause (b) of Explanation I ibid. In respect of Items 1, 2 & 3, ld. Counsel has cited decisions holding the goods to be eligible for Modvat credit under Rule 57Q. It appears from the records that Item No. 4 (VCM bullet) was used as container for transportation of input to the factory. Admittedly, the item was not used in the factory. Therefore, the benefit of Modvat credit would not be available for "VCM bullet" under Rule 57Q. The 5th item mentioned above was also used in captive power plant and the same was also covered by the definition of "capital goods" under Explanation I ibid. In the result, Appeal No. 142/99 is allowed only to the extent of den .....

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