Cenvat credit on steel inputs used to fabricate essential manufacturing equipment cannot be denied merely by Chapter 72 classification.

Cenvat credit on HR coils, MS plates, MS angles, MS channels and similar steel items was treated as admissible where the materials were factually found to have been used in fabricating a blending vessel and heating coil pipeline essential for manufacturing lubricating oils. The Tribunal noted concurrent findings on use in the manufacturing process and the absence of contrary evidence from the Revenue. It further observed that classification of the items under Chapter 72 did not, by itself, defeat credit once their use in fabrication of essential manufacturing equipment was established. The Revenue's challenge was therefore rejected and the credit order was affirmed.

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Issues: Whether Cenvat credit was admissible on HR coils, MS plates, MS angles, MS channels and similar materials used in the fabrication of blending vessel and heating coil pipeline, which were found to be essential for manufacture of lubricating oils.

Analysis: The lower authorities recorded concurrent findings that the disputed materials were used for manufacture and fabrication of blending vessel and heating coil pipeline, and that such equipment was essential for the final product. No contrary evidence was produced by the Revenue to dislodge these factual findings. The Tribunal noted that the Commissioner (Appeals) had relied on an earlier coordinate Bench decision on similar facts and that the Revenue had not established any legal or factual infirmity in the factual conclusion that the goods were used in the manufacturing process. In these circumstances, the objection that the items fell within Chapter 72 did not by itself negate credit where the factual use for fabrication of manufacturing equipment stood established.

Conclusion: Cenvat credit was held admissible on the disputed materials, and the Revenue's challenge was rejected.

Final Conclusion: The order allowing credit was affirmed, and the Revenue appeal failed.

Ratio Decidendi: Where materials are factually found to have been used in fabrication of equipment essential for manufacture, and such findings are not effectively rebutted, credit cannot be denied merely because the items are commercially known under a tariff chapter covering general steel goods.

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