Cenvat credit on structural steel for machine support structures was held eligible under the user test.

Cenvat credit was admissible on structural steel items such as plates, channels, angles and joists used to fabricate support structures for capital goods. The applicable test was whether the goods were used in relation to the manufacture or functioning of plant and machinery, and structural items forming support structures were treated as part of the relevant capital goods. On that basis, the credit was held eligible under the Cenvat Credit Rules framework, and the Revenue's challenge failed.

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Issues: Whether Cenvat credit was admissible on structural steel items used for fabrication of support structures for capital goods.

Analysis: The dispute concerned structural items such as plates, channels, angles and joists used in the fabrication of support structures necessary for the functioning of plant and machinery. The Tribunal followed its earlier decisions and the principle that the applicability of credit turns on the user test, namely whether the goods are used in relation to the manufacture or functioning of capital goods. Structural items worked upon for creating support structures for machines were treated as forming part of the relevant capital goods and, therefore, as eligible for credit under the relevant Cenvat Credit Rules framework.

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

Final Conclusion: The impugned order allowing the credit, and consequently rejecting the Revenue's grievance, was sustained.

Ratio Decidendi: Structural items used to fabricate support structures for capital goods satisfy the user test and fall within the scope of eligible capital goods credit.

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