CENVAT credit on structural steel for machine support structures depends on actual use and supporting proof.

CENVAT credit on MS angles, HR plates and HR coils used to fabricate support structures for capital goods was considered under the user test in Rule 2(a) of the Cenvat Credit Rules, 2004. The stated principle is that such structural steel items may qualify as components, spares or accessories of capital goods where they support and enable machinery function, but the claim must be proved by evidence of actual use. As the record lacked sufficient supporting material, including a Chartered Engineer's certificate, factual verification was required and the matter was remanded for fresh decision with liberty to adduce evidence.

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Issues: Whether CENVAT credit was admissible on MS angles, HR plates and HR coils used in fabrication of support structures for capital goods installed in the factory, and whether the claim required verification of supporting evidence.

Analysis: Credit on structural steel items used for fabrication of support structures is governed by the definition of capital goods under Rule 2(a) of the Cenvat Credit Rules, 2004. The applicable test is whether the goods, on actual user, function as components, spares or accessories of capital goods. The reasoning adopted from prior precedent recognises that where such items are used to support and enable the functioning of machinery, they may fall within the ambit of capital goods. At the same time, the claim must be established by evidence. Since the record did not contain sufficient supporting material, including a Chartered Engineer's certificate, factual verification was necessary.

Conclusion: The credit claim was not finally rejected; the matter was remanded for verification and fresh decision in accordance with the settled legal principle, with the assessee permitted to adduce evidence.

Ratio Decidendi: Structural steel items used in fabrication of support structures for capital goods can qualify for CENVAT credit if, on the user test, they function as components, spares or accessories of such capital goods, subject to proof of actual use.

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