CENVAT credit on plant and machinery components was upheld where items were supplied as part of the sugar plant.

CENVAT credit was admissible on structures and related components supplied as part of a sugar plant under Rule 57AA. The Tribunal found that the items were not merely supporting structures erected in the factory so as to become immovable property, and distinguished cases involving steel used only to fabricate embedded structures. It also noted that several disputed items were plant and machinery components rather than supporting structures. Credit therefore could not be denied on the ground that the goods were ineligible supporting structures, and the denial was unjustified.

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Issues: Whether CENVAT credit was admissible on structures and components supplied as part of the sugar plant under Rule 57AA of the Central Excise Rules, 1944.

Analysis: The disputed items were not found to be supporting structures erected in the factory so as to become immovable property. The facts were distinguished from cases where steel items were used for fabricating structures embedded to earth. The materials in question were supplied as part of the sugar plant, and the record also showed that several items for which credit was taken were plant and machinery components rather than supporting structures. The Tribunal followed the view that structures purchased as part of the plant are eligible for credit.

Conclusion: CENVAT credit was admissible and the denial of credit was not justified.

Ratio Decidendi: Where structures and related items are supplied as part of the plant and machinery itself and are not shown to be mere supporting structures erected into immovable property at the assessee's factory, credit cannot be denied on the ground that they are ineligible supporting structures.

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