Integral machinery support qualifies as capital goods, extending CENVAT credit to steel items used in fabrication.

MS angles, plates and rounds used to fabricate structural support for plant and machinery were treated as integral to the machinery used in manufacture. Rule 2(a) of the CENVAT Credit Rules, 2004 was read pari materia with the earlier Rule 57Q, and the Supreme Court principle on fabrication of a chimney for a DG set was applied. On that basis, steel items used for an integral supporting structure qualified as components, spares or accessories of capital goods and were eligible for CENVAT credit. The contrary view in Vandana Global Ltd. was noted as no longer good law after the later Supreme Court ruling.

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Issues: Whether MS angles, plates and rounds used for fabricating structural support for plant and machinery in the factory qualify as capital goods for availment of CENVAT credit under Rule 2(a) of the CENVAT Credit Rules, 2004.

Analysis: The structural support fabricated from the steel items was treated as an integral part of the machinery used in manufacture. The provision defining capital goods in Rule 2(a) was read as pari materia with the earlier Rule 57Q, and the principle laid down by the Supreme Court in the case concerning fabrication of a chimney for a DG set was applied. On that reasoning, steel items used to fabricate an integral supporting structure for machinery fall within the scope of components, spares or accessories of capital goods. The contrary view of the Larger Bench in Vandana Global Ltd. was held to be no longer good law in view of the subsequent Supreme Court ruling.

Conclusion: The MS angles, plates and rounds used for fabrication of the structural support qualified as capital goods for CENVAT credit, and the Revenue's appeal failed.

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