Cenvat credit on plant components allowed where equipment formed part of the manufacturing plant and circular supported eligibility.

Credit on capital goods was held admissible where Ziricon Oxygen Probe, Polymer Conductivity Analiser/Censor and Cable Tray were used as components of the plant in the manufacturing process. The Board's Circular dated 2-12-1996 was applied to clarify that components and accessories of specified goods qualify for credit regardless of classification. On that basis, denial of credit on the disputed items was found unsustainable, and credit was allowed in favour of the assessee.

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Issues: Whether credit was admissible on the capital goods, namely Ziricon Oxygen Probe, Polymer Conductivity Analiser/Censor and Cable Tray, on the ground that they were components or parts of the plant used in the manufacturing process.

Analysis: The goods were found to be used as components of the plant. The Board's Circular dated 2-12-1996, as relied upon by the appellants, clarified that components and accessories of specified goods are entitled to credit irrespective of classification. On that basis, denial of credit on the disputed capital goods was unsustainable.

Conclusion: Credit on the disputed capital goods was admissible and the denial of credit was set aside in favour of the assessee.

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