Cenvat credit on structural steel for capital goods support structures depends on actual use and proper factual verification.

Steel items used to fabricate support structures for capital goods may qualify for Cenvat credit if, on the user test, they form part of the machinery or its components, spares or accessories, and are not excluded merely because they are structural materials. The Tribunal also noted that the factual use of the items had not been adequately established on record, including by a Chartered Engineer's certificate or equivalent evidence. The proper course was verification of actual use against the settled legal principle, and the matter was remanded for fresh examination on evidence.

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Issues: Whether Cenvat credit was admissible on structural steel items used in fabrication of support structures for capital goods installed in the factory, and whether the claim required factual verification before grant of relief.

Analysis: The Tribunal applied the settled principle that steel items used in fabrication of support structures for capital goods may qualify for credit when, on the user test, they form part of the relevant machinery or its components, spares or accessories. Reliance was placed on the principle that such items are not to be excluded merely because they are structurals, provided they are used for fabrication of support structures for capital goods. At the same time, the Tribunal accepted that the factual basis of use had not been adequately established on record, including by a Chartered Engineer's certificate or comparable evidence. The proper course, therefore, was to have the adjudicating authority verify the actual use of the items in light of the settled legal principle.

Conclusion: The appeal was allowed by way of remand, and the question of eligibility of credit was sent back for fresh examination on evidence.

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