CENVAT credit on steel and iron fabrication items is admissible when used for machinery support and installation within the factory.

Steel and iron items used within a factory for fabricating support structures, platforms, staircases, walkways and other arrangements essential to the erection and functioning of machinery and capital goods may qualify for CENVAT credit. The admissibility turns on whether the facts show use for creditable installation-related fabrication rather than for non-creditable civil construction or permanently embedded structures. The commentary notes that later High Court rulings displaced reliance on the Larger Bench view in Vandana Global where the factual matrix supports credit. On the stated facts, credit was admissible and the Revenue challenge failed.

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Issues: Whether CENVAT credit was admissible on steel and iron items used for fabrication of support structures and for erection of machinery and capital goods within the factory.

Analysis: The items in dispute were claimed to have been used for making structures, platforms, staircases, walkways and other supporting arrangements required for installation and functioning of machinery for manufacture of sponge iron. The lower appellate authority found that the adjudicating authority had not distinguished the facts of the case and had not established that the goods were used merely as non-creditable civil structures or as materials embedded to the earth. The Tribunal also noted that later decisions had allowed credit on similar items and that the reliance on the Larger Bench view in Vandana Global was displaced by subsequent High Court rulings.

Conclusion: CENVAT credit on the impugned items was held admissible and the Revenue's challenge was rejected.

Ratio Decidendi: Steel and iron items used within the factory for fabrication of structures essential to the erection and functioning of capital goods are eligible for CENVAT credit when the facts do not show that the items were used merely for impermissible civil construction or permanent embedded structures.

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