CENVAT credit on steel support structures for machinery is admissible when they are integral to installation and functioning.

Steel and structural items used to fabricate support structures for capital goods were treated as eligible for CENVAT credit under Rule 2(a) of the Cenvat Credit Rules, 2004. Applying the user test and settled precedent, the Tribunal noted that such items are not excluded merely because they are not the machinery itself when they are integral to the installation, support and functioning of capital machinery. On that basis, cement, steel and steel structural items used for fabrication of the support structures were admissible as credit-eligible inputs or components for CENVAT purposes, and the appeal succeeded.

---

---

Issues: Eligibility of CENVAT credit on cement, steel and steel structural items used in fabrication of support structures for capital goods.

Analysis: The dispute turned on whether steel and structural items used to fabricate support structures for machinery could be treated as capital goods or as parts, components, spares or accessories of capital goods for the purpose of Rule 2(a) of the Cenvat Credit Rules, 2004. Applying the user test, the Tribunal followed settled precedent holding that such structural items, when used to support and enable functioning of capital machinery, are not to be excluded merely because they are not the machinery itself. The fabricated items, being integral to the installation and working of the machines, fall within the scope of capital goods for CENVAT purposes.

Conclusion: CENVAT credit on the impugned cement, steel and steel structural items was admissible, and the appeal succeeded.

---