Cenvat credit on structural steel support items upheld where used to fabricate machinery support structures.

Cenvat credit was held admissible on MS channels, rounds, angles and similar structural steel items used to fabricate support structures for plant and machinery. The Tribunal applied the user test and the inclusive definition of capital goods under Rule 2(a) of the Cenvat Credit Rules, 2004, treating items that support and facilitate the functioning of machinery as components, spares or accessories. On that basis, the Revenue's challenge failed and the order allowing credit was upheld.

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Issues: Whether cenvat credit was admissible on MS Channels, MS Rounds, MS Angles and similar structural steel items used in fabrication and erection of support structures for plant and machinery.

Analysis: The Tribunal noted that the lower authorities had consistently allowed credit on the basis of precedent, including the principle that structural steel items used to fabricate support structures for machinery can satisfy the user test and function as parts or components necessary for the smooth functioning of capital goods. It accepted that the definition of capital goods under Rule 2(a) of the Cenvat Credit Rules, 2004 includes components, spares and accessories, and relied on the settled view that items used to support and facilitate functioning of machinery are eligible for credit.

Conclusion: Cenvat credit on the disputed structural steel items was admissible; the Revenue's challenge failed.

Final Conclusion: The appeal was dismissed and the order allowing credit in favour of the assessee was upheld.

Ratio Decidendi: Structural steel items used to fabricate support structures that are necessary for the functioning of capital goods are eligible for cenvat credit where they fall within the inclusive scope of capital goods as components, spares or accessories.

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