CENVAT credit on structural steel used for capital goods cannot be denied when acceptable evidence proves fabrication use.

CENVAT credit was held admissible on MS angles, plates, channels and joists used to fabricate components and structural supports for kilns, conveyors, bunkers and pollution control equipment. The evidence, including a Chartered Engineer certificate and the Revenue's own acceptance of substantial credit on that basis, was sufficient to establish actual use in relation to capital goods. A denial based only on a general objection that the items were not inputs or capital goods, or on an alleged lack of proof of use, was not justified on the facts. Credit on such structural steel items cannot be refused where acceptable evidence shows use in fabrication of components or supports for plant and equipment.

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Issues: Whether CENVAT credit was admissible on iron and steel items such as MS angles, plates, channels and joists used for fabrication and erection of structures and components supporting plant and equipment, and whether the denial of credit on the ground of alleged non-establishment of actual use was justified.

Analysis: The credit dispute turned on the use of the impugned goods in fabrication of components and supporting structures for kilns, conveyors, bunkers and pollution control equipment. The record included a Chartered Engineer certificate certifying such use, and the Revenue itself had accepted substantial credit on the basis of that certificate in the show cause notice. The authority below rejected the claim mainly for want of proof of actual use and treated the certificate as vague, but that approach was not supported on the facts. In similar matters, credit had been allowed where steel items were used as components or structural supports for capital goods, and the evidence on record was sufficient to establish such use.

Conclusion: The assessee was entitled to CENVAT credit on the impugned goods, and the denial of credit was unsustainable.

Final Conclusion: The appeal succeeded, the impugned denial of credit was set aside, and consequential relief followed.

Ratio Decidendi: Where structural steel items are shown by acceptable evidence to have been used in fabrication of components or supports for capital goods, CENVAT credit cannot be denied merely on a generalized objection that the items are not inputs or capital goods.

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