Cenvat credit on goods used to install factory air-conditioning plant held admissible under the capital goods scheme.

Cenvat credit was admissible on goods used to install a refrigeration and air-conditioning system in the factory because the items fell within the relevant definition of capital goods and the aluminium sheets were treated as part of those goods. The plant was installed for manufacture of dutiable final products, and inputs used in the manufacture of capital goods used in the factory qualified for credit under the statutory scheme. The Revenue failed to show any error in the order under challenge, so the assessee's entitlement to credit was upheld and the Revenue's appeal was dismissed.

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Issues: Whether Cenvat credit was admissible on goods used for installation of a refrigeration and air-conditioning system in the factory, and whether the appeal by Revenue deserved to be allowed.

Analysis: The goods in question were found to fall within the relevant chapters covering capital goods, and the aluminium sheets were treated as part of the capital goods used for installation of the air-conditioning plant. The plant was installed in the factory for manufacture of dutiable final products. The relevant credit provisions were applied to hold that inputs used in the manufacture of capital goods, which are themselves used in the factory of production, qualify for credit. The Revenue did not establish any error or impropriety in the order under challenge.

Conclusion: Cenvat credit was held admissible and the Revenue's appeal was dismissed.

Final Conclusion: The assessee's entitlement to credit was upheld, with consequential relief as permissible in law.

Ratio Decidendi: Goods used in the manufacture and installation of capital goods within the factory for producing dutiable final products are eligible for Cenvat credit where the statutory definition of inputs and capital goods is satisfied.

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