CENVAT credit on structural steel for capital goods depends on the user test and factual verification before allowance.

CENVAT credit on MS channels, angles, TMT bars and similar structural items used in fabrication of support structures for capital goods may be allowable where the user test is satisfied and the items function as components or parts of capital goods. Applying the principle recognised in Singhal Enterprises, the Tribunal held that actual use still required factual verification, and the Chartered Engineer's certificate had to be examined before any credit determination. The eligibility question was therefore not finally decided on merits, and the matter was remanded to the adjudicating authority for fresh consideration under the settled legal test.

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Issues: Whether CENVAT credit was admissible on MS channels, angles, TMT bars and similar structural items used in fabrication of support structures and capital goods within the factory, and whether the matter required remand for verification of the Chartered Engineer's certificate.

Analysis: The structural items were claimed to have been used for erection and fabrication of capital goods installed in the factory. The principle applied was that goods used in the fabrication of support structures for capital goods may qualify as components or parts of capital goods when the user test is satisfied. The decision in Singhal Enterprises and the law on user test were treated as governing the eligibility question. At the same time, the certificate produced by the appellant required verification, and the factual claim of use was not finally examined by the adjudicating authority.

Conclusion: The issue of eligibility of credit was not finally decided on merits and the matter was remanded to the adjudicating authority for fresh examination in accordance with the settled legal principle.

Final Conclusion: The appeal succeeded only to the extent of remand, leaving the factual and eligibility questions open for reconsideration by the adjudicating authority.

Ratio Decidendi: Structural items used in the fabrication of support structures for capital goods may fall within the ambit of capital goods or eligible inputs when the user test is satisfied, but factual verification of actual use remains necessary before granting credit.

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