Cenvat credit on structural steel for support structures may be admissible, subject to proof of actual functional use.

Prefabricated steel items used to fabricate support structures for capital goods may qualify for Cenvat credit as components or accessories under Rule 2(a) of the Cenvat Credit Rules, 2004 if they satisfy the user test and are functionally necessary for machine operation. The principle was answered in favour of admissibility, but final relief depended on verification of the actual use of the steel items in the factory. The impugned order was set aside and the matter remanded for factual examination of their use before credit could be finally granted.

---

---

Issues: Whether Cenvat credit was admissible on prefabricated steel items used in the fabrication of supporting structures for capital goods, and whether the matter required factual verification.

Analysis: Credit on structural steel items used for support structures was examined in light of the definition of capital goods under Rule 2(a) of the Cenvat Credit Rules, 2004 and the applicable user test. Structural items fabricated into supports for machinery were treated as falling within the ambit of components or accessories of capital goods where they were functionally necessary for the working of the machines. At the same time, the actual use of the prefabricated steel items in the factory had to be verified on facts before final relief could be granted.

Conclusion: The issue was answered in principle in favour of admissibility of credit on such structural items, but the matter was remanded to verify their actual use, and the impugned order was set aside.

Ratio Decidendi: Structural steel items used in fabrication of support structures for capital goods may qualify for Cenvat credit as components or accessories of capital goods if they satisfy the user test, subject to factual verification of their actual use.

---