CENVAT credit on prefabricated shed materials denied where factory building materials do not fit capital goods or input definitions.

Prefabricated building materials used to construct a shed or manufacturing premises were held not to qualify for CENVAT credit. The goods fell under Chapter 94, which is outside the specific tariff entries covered by the definition of capital goods under Rule 2(a) of the Cenvat Credit Rules, 2004, and a shed or building used in a factory is not itself capital goods. The alternative claim as inputs under Rule 2(k) also failed because the cited authorities concerned different factual settings, such as inputs linked to capital goods or output services, and did not extend to materials used for erecting factory premises. The operative principle is that credit depends on strict satisfaction of the statutory definition.

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Issues: Whether prefabricated building materials used for construction of a shed or manufacturing premises are eligible for CENVAT credit as capital goods or, alternatively, as inputs.

Analysis: The subject goods were found to fall under Chapter 94 of the First Schedule to the Central Excise Tariff Act, 1985. The definition of capital goods under Rule 2(a) of the Cenvat Credit Rules, 2004 covers only specified tariff chapters and certain enumerated categories, and does not include Chapter 94 items. A shed or building, even if used in the factory, is not itself capital goods within that definition. The alternative plea under Rule 2(k) was also rejected because the cited precedents related to inputs used in relation to capital goods or for different factual settings, such as storage tanks, machinery covers, or output services, and were not applicable to prefabricated building materials used to erect manufacturing premises.

Conclusion: Prefabricated building materials used for construction of a shed or manufacturing premises are not eligible for CENVAT credit either as capital goods or as inputs.

Ratio Decidendi: Eligibility for CENVAT credit depends on the goods falling within the specific statutory definition of capital goods or inputs, and materials used to construct a factory shed or building do not qualify merely because they are used in the factory.

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