Cenvat credit on structural steel for machinery support structures was held admissible for the relevant period.

Cenvat credit on iron and steel items used to fabricate support structures for capital goods and plant machinery was held admissible. The Tribunal applied the user test, finding that the structural steel was used to create supports on which the machinery was installed and that those fabricated structures were integral to the functioning of the equipment. It also treated the amendment to Explanation II to Rule 2(a) of the Cenvat Credit Rules, 2004 as prospective, so it did not affect the relevant period. Credit was therefore allowed in favour of the assessee.

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Issues: Whether Cenvat credit was admissible on iron and steel items used for fabrication of support structures for capital goods and plant and machinery.

Analysis: The Tribunal followed its earlier decision on the same issue and applied the user test to the disputed items. It noted that the structural steel items were used to fabricate support structures on which capital goods were installed and that such fabricated structures were integral to the functioning of the machinery. The Tribunal also relied on the view that the amendment to Explanation-II to Rule 2(a) of the Cenvat Credit Rules, 2004 was prospective and did not alter the position for the relevant period.

Conclusion: Cenvat credit was admissible on the structural steel items used in fabrication of support structures, and the issue was decided in favour of the assessee.

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