Whether Iron and Steel structures manufactured and used captively in the factory for installation of the Sugar manufacturing plant by the assessee can be classified as capital goods under Rule 57Q of the Central Excise Rules, 1944?

Saraswati Sugar Mills Vs Commissioner Of Central Excise, Delhi- III (Supreme Court of India)- The question which arose before the Tribunal was that whether these items used for fabricating structures to support and install various machinery of the sugar plant are capital goods in terms of the Rule 57Q. The Tribunal while allowing the MODVAT credit found that these items, except MS sections and shapes, used for raising structure to support the various machines, parts of machinery of the plant would be covered by the explanation to Rule 57Q as a capital goods.

Anything required to make the goods a finished item can be described as component parts. Iron and Steel structures would not go into the composition of vacuum pans, crystallises etc. If an article is an element in the composition of another article made out of it, such an article may be described as a component of another article.

RE PORTABLE

IN THE SUPREME COURT OF INDIA

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