Cenvat credit on fabrication materials allowed where steel items were used for plant and machinery, not immovable property.

Cenvat credit on steel items used to fabricate plant, machinery and factory structures was found admissible because the materials were used in capital goods and equipment such as kiln cooler and material handling systems. The Revenue's objection that the fabricated items became immovable property was rejected, as the record did not show that the items were fixed to the earth in a manner denying excisability or credit eligibility. On the materials and case law examined, the Tribunal accepted that the goods were used in manufacture of machinery and no contrary evidence established creation of immovable property.

---

---

Issues: Whether Cenvat credit was admissible on items used for fabrication of machinery and structures in the factory when Revenue alleged that such items resulted in immovable property and were not eligible for credit.

Analysis: The dispute turned on the eligibility of credit under the Cenvat Credit Rules, 2004 for steel items used in fabrication of plant and equipment. The lower authorities had found, on examination of the material and the case law, that the items were used in the manufacture of capital goods and machinery such as kiln cooler and material handling systems, and that the Revenue had produced no material to show creation of immovable property. The challenge before the Tribunal rested only on a broad assertion that the fabricated items were fixed to the earth and therefore not excisable, but the record did not support that contention.

Conclusion: Cenvat credit was held admissible and the Revenue's objection that the fabricated items became immovable property was rejected.

---