CENVAT credit on structural and machinery support items allowed where item-wise use and evidence satisfied the user test.

CENVAT credit was admissible on steel items and other goods used for repair, maintenance, fabrication, expansion and support structures of machinery because item-wise evidence and the Chartered Engineer's certificate established eligible manufacturing-related use. The Tribunal applied the user test under Rule 2(a) of the Cenvat Credit Rules, 2004 and accepted that structural items used to fabricate support structures for capital goods can qualify as capital goods or eligible inputs. The remand for fresh verification was unsustainable because the lower authority had not properly considered the evidence already on record, and the assessee was entitled to consequential relief.

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Issues: Whether the impugned order remanding the matter for fresh verification of the actual usage of the goods was sustainable, and whether CENVAT credit on the disputed goods used for repair, maintenance, fabrication, expansion and support structures of machinery was admissible.

Analysis: The appeal arose from denial of credit on steel items and other goods on the premise that they were used for civil construction and related works. The record showed that the Commissioner (Appeals) had accepted that the disputed credit was not confined to goods falling under Chapter 72 alone, and that several items falling under Chapters 84, 85 and 90 were covered within the definition of capital goods. The Chartered Engineer's certificate, certifying item-wise usage for repair, maintenance, modification and expansion of machinery and accessories during the relevant period, had not been properly considered. The Tribunal further relied on the settled principle that structural items used in fabrication of support structures for capital goods satisfy the user test and can qualify as capital goods or eligible inputs under Rule 2(a) of the Cenvat Credit Rules, 2004.

Conclusion: The remand order was held unsustainable, and the appeal was allowed with consequential relief. The assessee was held entitled to the disputed CENVAT credit.

Final Conclusion: The adjudication below was set aside because the disputed goods were found to be used for eligible manufacturing-related purposes and the item-wise evidence supported credit admissibility.

Ratio Decidendi: Goods used in fabrication of support structures or in repair and maintenance of machinery may qualify for CENVAT credit when their use is established and the user test is satisfied under the credit rules.

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