CENVAT credit on fabrication materials remanded for fresh verification of actual factory use and documentary proof.

Eligibility for CENVAT credit on MS angles, joists, channels, plates and similar goods depended on their actual use in fabricating capital goods, parts, components or accessories within the factory. The Tribunal found that verification of usage was necessary and that the assessee should be allowed to rely on Chartered Engineer certificates, photographs, drawings and other documents to substantiate the claim. As the original authority had not examined this material, the matter was remanded for fresh verification and a reasoned decision after following natural justice.

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Issues: Whether the appellants were entitled to CENVAT credit on MS angles, joists, channels, plates and similar goods used for fabrication of capital goods, parts, components or accessories, and whether the matter required remand for verification of their actual usage.

Analysis: The dispute turned on the actual use of the impugned goods within the factory for fabrication of conveyor systems, storage tanks, pollution control equipment and allied structures said to form part of capital goods. The appellate authority had declined to consider the Chartered Engineer certificates and related material on the ground that they were not produced before the original authority. The Tribunal held that verification of the usage was essential for deciding eligibility under the CENVAT Credit Rules, and that the assessee should be afforded an opportunity to substantiate its claim with the certificates, photographs, drawings and other relied-upon documents. The original authority was required to examine the material and pass a reasoned order after following natural justice.

Conclusion: The matter was remanded to the original authority for fresh verification of the usage of the impugned goods and for reconsideration of the CENVAT credit claim.

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