Cenvat credit on essential analyzer component allowed where the item was treated as an input and integral to machine function.

Cenvat credit was held admissible on californium-252 used in a fast lab analyzer because the material was an essential component of the machine and the analyzer could not operate without it. The fact that the item was consumed over time did not disqualify it from credit where the record and manufacturer's brochure showed it formed part of the analyzer. The Tribunal also held that, without deciding the wider capital goods question, the item in any event qualified as an input, so credit was available and the Revenue's challenge failed.

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Issues: Whether Cenvat credit was admissible on radio active material (californium-252) used in a fast lab analyzer, and whether the item could be treated as capital goods or at least as inputs.

Analysis: The item was found to be an essential component of the analyzer and not disqualified merely because it was consumed over time. The record showed that the analyzer could not function without it, and the manufacturer's brochure described the item as a component of the machine. The Tribunal further held that, without entering into the larger question whether it qualified as capital goods, the item in any event fell within the definition of inputs, making credit admissible.

Conclusion: Cenvat credit on the item was admissible and the Revenue's appeal failed.

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