Cenvat credit on structural steel for support structures turns on functional use, prospective amendment, and proof of actual use.

Structural steel items such as MS angles, channels and TMT bars may qualify for Cenvat credit when they are used to fabricate support structures for capital goods installed in the factory, because their eligibility depends on the functional user test rather than independent classification as capital goods. The Tribunal also noted that the relevant amendment excluding such goods operates prospectively from 7 July 2009 and is not merely clarificatory. However, credit could be allowed only on proof of actual use, so the factual claim required verification, including supporting evidence such as a Chartered Engineer's certificate. The matter was remanded for fresh examination on that limited factual issue.

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Issues: Whether Cenvat credit was admissible on structural steel items used for fabrication of support structures for capital goods installed in the factory.

Analysis: The Tribunal applied the user test to determine whether the goods in question, though not independently capital goods, were used in the fabrication of support structures essential for the functioning of capital goods. It relied on the view that structural items such as MS angles, channels and TMT bars, when used for making support structures on which capital goods are placed, can fall within the ambit of capital goods. The Tribunal also noted that the amendment to the relevant definition with effect from 7 July 2009 was held by the Gujarat High Court to operate prospectively and not as a clarificatory amendment. At the same time, the claim had to be supported by evidence of actual use.

Conclusion: Such structural items would be eligible for Cenvat credit if used for fabrication of support structures for capital goods, but the factual claim required verification on evidence, including a Chartered Engineer's certificate.

Final Conclusion: The matter was remanded for fresh examination of eligibility in the light of the settled legal principle, with the factual issue left open.

Ratio Decidendi: Structural steel items used in the fabrication of support structures for capital goods may qualify for Cenvat credit when their functional use satisfies the user test, and an amendment expanding the exclusion operates prospectively unless expressly made retrospective.

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