Cenvat credit on steel items used to fabricate sugar mill machinery was admissible; reversal demand was unjustified.

Cenvat credit was held admissible on steel items such as MS sheets, plates, joists, angles and channels used to fabricate machinery and components for a sugar factory, including cane carrier, juice clarifier, evaporator, pan station, molasses tanks and boiler parts. The Tribunal treated these items as inputs used in fabrication of capital goods, not as mere supporting structures embedded to earth, and distinguished contrary rulings on immovable structures as inapplicable on the facts. The reversal demanded was therefore not justified.

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Issues: Whether Cenvat credit was admissible on steel items such as MS sheets, plates, joists, angles and channels used in fabrication of capital goods and related components for the sugar factory.

Analysis: The steel items were found to have been used for fabrication of machinery and components such as cane carrier, juice clarifier, evaporator, pan station, molasses tanks, boiler parts and other capital goods used in the manufacture of sugar and molasses. The disputed items were distinguished from mere supporting structures embedded to earth, since on the facts they constituted inputs used in fabrication of capital goods. The Tribunal also followed the view reflected in the circular relied upon and held that the cited contrary decisions on immovable supporting structures were inapplicable on the facts.

Conclusion: Cenvat credit was admissible on the items in question and the reversal demanded was not justified.

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