Cenvat credit on boiler fabrication materials upheld; disclosed credit and no suppression defeated extended limitation.

Iron and steel items actually used in fabrication and installation of boiler-related operational components were not treated as mere supporting structures or foundation material, so the exclusion from "inputs" under Rule 2(k)(iii) of the Cenvat Credit Rules, 2004 was not applied and credit denial failed. The demand was also held time-barred because the disputed credit was disclosed in statutory returns, the issue was already the subject of extensive litigation, and the record did not show suppression of facts or intent to evade duty; the extended limitation period was therefore inapplicable.

---

---

Issues: (i) whether iron and steel items used in fabrication and installation of boiler-related components and interconnected structures were excluded from the definition of inputs under Rule 2(k)(iii) of the Cenvat Credit Rules, 2004; (ii) whether the demand was barred by limitation for want of suppression or intent to evade duty.

Issue (i): whether iron and steel items used in fabrication and installation of boiler-related components and interconnected structures were excluded from the definition of inputs under Rule 2(k)(iii) of the Cenvat Credit Rules, 2004.

Analysis: The disputed goods were examined with reference to the invoices and photographs and were found to have been used in fabrication of coal bunker, feeding system, furnace area, economizer, air pre-heater and other operational structures connected with the boiler. The finding recorded was that these items were not merely supporting structures or foundation material, and that a boiler and its components require substantial interconnected fabrication for operation and upkeep. On that factual basis, the exclusion urged by the Revenue was not accepted.

Conclusion: The credit denial on this ground was not sustained and the issue was decided in favour of the assessee.

Issue (ii): whether the demand was barred by limitation for want of suppression or intent to evade duty.

Analysis: The disputed credit had been reflected in the statutory returns, and the controversy related to a class of items on which there had been extensive litigation. In these circumstances, the record did not support an inference of suppression of material facts or intention to evade duty, so the extended limitation was held inapplicable.

Conclusion: The demand was held to be time-barred and the issue was decided in favour of the assessee.

Final Conclusion: The Revenue's appeal failed on both merits and limitation, and the order allowing Cenvat credit was left undisturbed.

Ratio Decidendi: Iron and steel items actually used in fabrication of boiler-related operational components are not to be treated as mere supporting structures for exclusion from Cenvat credit, and where the disputed credit is disclosed in returns amid a contentious legal position, the extended period of limitation cannot be invoked absent suppression or intent to evade duty.

---