Cenvat credit on steel used for machinery support structures allowed where the user test shows integral fabrication use.

Steel plates, channels and similar items used to fabricate supporting structures for plant and machinery can qualify for Cenvat credit where the user test is satisfied and the structures are integral to erection and functioning of the machinery. The Court treated its earlier view in the assessee's own case as governing, distinguished the contrary precedent on facts, and held that the later notification did not justify denial on the facts presented. The Tribunal's order refusing credit was set aside and the assessee's claim was accepted.

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Issues: Whether Cenvat credit was admissible on steel items used in the fabrication and erection of supporting structures for plant and machinery, and whether the Tribunal was justified in denying relief by applying the later notification and the contrary precedent.

Analysis: The dispute turned on whether the items in question were used as inputs for fabrication of structurals integral to the erection and functioning of the machinery. The Court followed the earlier decision applying the user test and held that steel plates, channels and similar materials used for fabrication of supporting structures fell within the ambit of capital goods in the facts of the case. The decision relied upon by the Revenue was found distinguishable on facts, and the earlier view of the Court in the assessee's own case was treated as governing the issue.

Conclusion: The issue was decided in favour of the assessee. The Tribunal's order denying the credit was set aside.

Final Conclusion: The appeals succeeded and the assessee's claim was accepted on the basis of the earlier binding factual and legal determination.

Ratio Decidendi: Steel items used in the fabrication of structurals essential for erection and functioning of plant and machinery can qualify for Cenvat credit when the user test is satisfied and the contrary precedent is factually distinguishable.

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