Cenvat credit on steel used for machinery support structures upheld under the user test and later Tribunal precedent.

Cenvat credit was allowed on steel and other items used in fabrication, alignment and support structures for machinery and plant installed in the factory. The Tribunal applied the user test and followed its earlier line of decisions holding that materials used to fabricate support structures and machinery parts for capital goods can qualify as eligible inputs or as part of capital goods for credit purposes. Contrary views were not followed because later decisions recognised credit where the materials are used for supporting and installing plant and machinery within the factory premises.

---

---

Issues: Whether the appellant was entitled to Cenvat credit on steel and other items used in fabrication of machinery parts and support structures for plant and equipment.

Analysis: The items were shown to be used for fabrication, alignment and support of machinery installed in the factory. The Tribunal applied the user test and followed its earlier decisions holding that steel items and similar materials used in the fabrication of support structures for capital goods fall within the scope of capital goods or eligible inputs for Cenvat credit. The reliance on contrary views was displaced by the later line of decisions recognising credit where the materials are used for supporting and installing plant and machinery within the factory premises.

Conclusion: The appellant was entitled to Cenvat credit on the items in question.

---