Cenvat credit on steel used for capital-goods support remains admissible despite immovable structural embedding.

Cenvat credit was treated as admissible on iron and steel items used to fabricate and erect structures that support capital goods, because eligibility depended on the goods' functional use as components or support, not merely on whether the resulting structure was embedded to earth and became immovable property. The Tribunal followed the settled position that such structural support can qualify for credit where it is integral to capital goods installation and operation. On that basis, the denial of credit, along with interest and penalty, was held unsustainable.

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Issues: Whether Cenvat credit was admissible on iron and steel items used for fabrication and erection of structures supporting capital goods, even though such structures were embedded to earth and became immovable property.

Analysis: The Tribunal followed the view that eligibility to Cenvat credit is determined with reference to the use of the goods as components of capital goods or as structural support for capital goods, and not merely by the fact that the resultant structure is embedded to earth. Relying on the settled legal position, it held that iron and steel items used for such fabrication and support qualified for credit, and the contrary denial could not be sustained.

Conclusion: The appellant was entitled to the Cenvat credit claimed, and the denial of credit, interest, and penalty was unsustainable.

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