Accessories to capital goods can qualify for Cenvat credit when functionally linked and used in the factory.

Tippers used as accessories to a conveyor system were treated as capital goods under the Cenvat Credit Rules, 2002 because Rule 2(b) extended coverage to components, spares and accessories of specified goods, including machinery falling under Chapter 85. On that basis, the tippers, being functionally connected with the conveyor system and used in the factory, fell within the inclusive scope of capital goods. The document also notes support from a departmental circular and a prior analogous decision, and states that Cenvat credit was admissible to the assessee.

---

---

Issues: Whether tippers used as accessories to a conveyor system are entitled to Cenvat credit as capital goods under the Cenvat Credit Rules, 2002.

Analysis: Capital goods under Rule 2(b) included specified goods falling under Chapters 82, 84, 85, 90, heading 68.02 and sub-heading 6801.10, and also covered components, spares and accessories of those goods. The tippers were treated as accessories to the conveyor system, which fell under Chapter 85. On that basis, they were held to fall within the inclusive scope of capital goods. Support was also drawn from the departmental circular and the prior decision allowing credit on analogous machinery.

Conclusion: The tippers qualified as capital goods and Cenvat credit was admissible in favour of the assessee.

Ratio Decidendi: Accessories of specified capital goods are themselves eligible for Cenvat credit when they are used in the factory and are functionally connected to the capital goods covered by the rule.

---