ORDER
1. This appeal is by the Revenue represented by the learned SDK. No representation for the respondents despite notice, nor any request of theirs for adjournment.
2. After examining the records and hearing the learned SDR, I find that the short question to be decided upon in this case is whether the respondents were entitled to avail capital goods credit in September, 1998 on Computer hardware system used within their factory to monitor speed of the ring spinning machines to analyse the production, productivity, quality parameters and to process the data of cotton yarn. The lower appellate authority, after considering this use of the items within the factory of production of final products, held that capital goods credit was available to the goods. The appellate authority relied on the judgment of the Hon’ble Supreme Court in jawahar Mills v. C.C.E. reported in 2002 (132) E.L.T. 3 (S.C.).
3. The Revenue in the present appeal submits that admissibility of Modvat credit to capital goods during the above period, was not based on its use within the factory, but on its classification under the Central Excise tariff. The capital goods in question were admittedly falling under heading 84.71 and the goods falling under this heading were not specified for capital goods credit under Rule 57Q during the above period. The Hon’ble Supreme Court’s judgment in Jawahar Mills (supra) was in relation to the period prior to 1-3-97, the date on which Rule 57Q was recast on tariff classification basis. 1 have to accept this argument of the learned SDR inasmuch as the Hon’ble Supreme Court’s judgment in Jawahar Mills (supra) relating to the period prior to 1-3-97 is not applicable to the period of dispute in the instant case. Admittedly, heading 84.71 was not one of the entries specified under Rule 57Q during the said period. Hence Computer hardware system falling under heading 84.71 cannot claim capital goods credit for the above period. The impugned order is set aside and this appeal of the Revenue is allowed.
(Dictated and pronounced in open Court)