Cenvat credit on structural steel used for factory support structures upheld under the user test for capital goods.

Cenvat credit on angles, channels and joists used in fabrication of conveyor gallery, gas cleaning plant, hopper, EOT crane and related support structures inside the factory was held admissible. Applying the user test, the steel items were treated as parts, components or accessories of capital goods because they were used in fabrication of supporting structures for machinery within the factory. The Chartered Engineer's certificate supported item-wise use of the materials, and the Revenue's contrary view was not accepted on these facts. The disputed steel items were therefore eligible for credit, and the Revenue's appeal was rejected.

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Issues: Whether Cenvat credit was admissible on angles, channels and joists used in fabrication of capital goods and supporting structures within the factory.

Analysis: The credit claim was supported by a Chartered Engineer's certificate showing item-wise usage of the steel materials in fabrication of conveyor gallery, gas cleaning plant, hopper, EOT crane and allied structures. The decisive test was whether such items, when used in fabrication of capital goods and their support structures, could be treated as eligible inputs or components under the Cenvat scheme. Applying the user test, the structural steel items used for fabrication of support structures for machinery inside the factory were held to form part of the relevant capital goods. The earlier view relied upon by the Revenue was not accepted in the facts of the case.

Conclusion: Cenvat credit was admissible on the disputed steel items, and the Revenue's appeal was rejected.

Ratio Decidendi: Structural steel items used in fabrication of support structures for capital goods within the factory are eligible for Cenvat credit when they satisfy the user test and function as parts, components or accessories of such capital goods.

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