Cenvat credit on steel items used to manufacture machinery parts is admissible when they are not foundation or support structures.

Cenvat credit was admissible on MS angles, channels, plates, flats, joints and HR sheets where the assessee showed their use in manufacturing parts and components of plant and machinery. The Revenue failed to prove that the goods were used as embedded structures, factory shed material or foundation/support items. A technical certificate supported use in storage tanks, conveyor system, kiln cooler, chimney, transfer chutes and related equipment, placing the items within manufacture of Chapter 84 components rather than mere structural steel. The reasoning in Vandana Global was held inapplicable on these facts, and the principle in Associated Cement Co. Ltd. was followed, so the Revenue's challenge failed.

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Issues: Whether Cenvat credit was admissible on MS angles, channels, plates, flats, joints and HR sheets used for manufacture of parts and components of plant and machinery, or whether the items were used as structural material for erection and installation of capital goods.

Analysis: The claim to credit had to be established by the assessee. The Revenue did not produce evidence to show that the disputed items were used in embedded structures, factory shed construction, or laying of foundation. The technical certificate indicated use of the goods in storage tanks, conveyor system, kiln cooler, chimney, transfer chutes, intermediate bin and storage tanks for products. The items were therefore treated as materials used in manufacture of parts and components falling under Chapter 84 of the Central Excise Tariff Act, 1985 and not as mere structural steel covered by the ratio against credit on foundation or support structures. The reasoning in Vandana Global was held inapplicable on the facts, while the principle applied in Associated Cement Co. Ltd. was followed.

Conclusion: Cenvat credit on the disputed steel items was admissible and the Revenue's challenge failed.

Ratio Decidendi: Where steel items are shown to have been used in manufacture of parts and components of machinery and not in foundation or supporting structures, Cenvat credit cannot be denied on the footing that they are merely structural items.

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