Boiler parts eligibility for Cenvat credit survives site fabrication when structural components form an integral part of the system.

Structural components fabricated at site for use in boiler erection were held to be parts of the boiler system where they functioned as integral components, so their classification was not displaced merely because fabrication occurred at site. The exclusion applicable to foundation or support structures did not apply in the same manner once the goods were found to form part of the boiler upon erection. The reclassification under Chapter 73 and the resulting denial of Cenvat credit were therefore unsustainable, and credit on the disputed items was held admissible.

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Issues: Whether Cenvat credit was admissible on steel items fabricated at site and used in the erection of boilers, and whether such items could be treated as supporting structures excluded from credit.

Analysis: The dispute turned on the true character of the fabricated items and their use in the boiler system. The Tribunal noted that the impugned order had treated all site-fabricated items as supporting structures without identifying the goods individually. Relying on the earlier tribunal view and the Supreme Court's treatment of boiler-related structural components, it held that where structural components are used as part of the boiler system, their classification under Heading 8402 is not displaced merely because they are fabricated at site. Once such goods are found to be parts of the boiler, the exclusion meant for foundation or support structures does not apply in the same manner. The reclassification under Chapter 73 and the consequent denial of credit were therefore held to be unsustainable.

Conclusion: Cenvat credit on the disputed site-fabricated items was held admissible and the denial of credit was set aside.

Ratio Decidendi: Structural components used as integral parts of a boiler system are classifiable as boiler parts and remain eligible for Cenvat credit; mere fabrication at site does not make them ineligible as support structures when they form part of the boiler upon erection.

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