CENVAT credit on structural steel items depends on actual use in capital goods and must be verified on evidence.

CENVAT credit on steel items used in fabrication of support structures or capital goods within the factory depends on the functional use test and on whether the fabricated structures qualify as parts, components, spares or accessories of capital goods. The claim could not be finally accepted on the existing record because the supporting Chartered Engineer's certificate had not been produced before the lower authorities and the actual use of the goods required evidentiary verification. The matter was remanded to the adjudicating authority for fresh examination of the credit claim in light of the governing eligibility principle, with liberty to adduce evidence.

---

---

Issues: Whether CENVAT credit was admissible on steel items used in fabrication of support structures or capital goods within the factory, and whether the claim required verification of evidence before final determination.

Analysis: The items in question were claimed to have been used in fabrication of capital goods installed in the factory. The Tribunal noted the principle that credit on such items depends on the functional use test and on whether the fabricated structures can be treated as parts, components, spares or accessories of capital goods. At the same time, the Tribunal accepted that the appellant had not produced the supporting Chartered Engineer's certificate before the lower authorities, and agreed that the factual use of the goods needed to be established by evidence. In these circumstances, the Tribunal held that the claim could not be finally decided on the existing record and had to be examined afresh by the adjudicating authority in the light of the governing legal principle.

Conclusion: The issue was remanded for verification of the appellant's claim to CENVAT credit, with liberty to produce evidence and with the legal principle on eligibility to be applied by the adjudicating authority.

Final Conclusion: The appeal succeeded only to the extent of remand, leaving the substantive eligibility question open for fresh adjudication on evidence.

Ratio Decidendi: Where eligibility to CENVAT credit on structural items depends on their actual use in fabrication of capital goods, the claim must be supported by evidence and may be remanded for factual verification applying the user test.

---