CENVAT credit for structural steel used in machinery erection upheld where the items formed integral plant components.

Structural steel items used in the erection of plant and machinery for a cement unit were treated as eligible capital goods for CENVAT credit because they formed integral components of the machinery and satisfied the user test. The Court followed the assessee's own earlier case on the same factual matrix and held that the contrary precedent relied on by the Revenue was distinguishable on its facts. Credit was therefore upheld and the Revenue's challenge failed.

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Issues: Whether structural steel items used in the erection of plant and machinery for the cement manufacturing unit were eligible as capital goods for CENVAT credit.

Analysis: The Tribunal had found that the items were used in the erection of machinery and formed integral components of the plant, thereby satisfying the user test. The Court noted that the issue had already been decided in the assessee's own case and that the cited contrary precedent was distinguishable on its facts. On the same factual matrix, the earlier view that such items used for erection of machinery could qualify for credit was followed.

Conclusion: The assessee was entitled to the credit claimed and the Revenue's challenge failed.

Final Conclusion: The order of the Tribunal allowing credit was sustained and the Revenue's appeal was rejected.

Ratio Decidendi: Goods used as integral parts or components in the erection of machinery, where the user test is satisfied, can qualify for CENVAT credit as capital goods, and a factually distinguishable precedent will not displace that conclusion.

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