Cenvat credit on fabrication inputs for factory capital goods was treated as admissible, with reversal refunded in cash.

Steel and allied items used within the factory for fabrication and erection of an EOT crane and a power house station were treated as inputs used in the fabrication of capital goods and related support structures, so cenvat credit was held admissible. The article notes that such items were essential for setting up and running the manufacturing unit, and the credit disallowance was therefore not sustainable. Where the credit amount had been reversed under protest during investigation, the reversed sum was directed to be refunded in cash under the transitional provision.

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Issues: Whether cenvat credit was admissible on steel and allied items used in the fabrication and erection of EOT crane and the power house station in the appellant's factory, and whether the amount reversed under protest was refundable in cash.

Analysis: The disputed items were used within the factory for erection of the EOT crane and for fabrication of the power house station, both of which were essential for setting up and running the manufacturing unit. The Tribunal treated the goods as inputs used in the fabrication of capital goods, including support structures, and applied the settled principle that inputs and input services used in such fabrication qualify for cenvat credit. On that basis, the credit disallowance was not sustainable. Since the credit had been reversed under protest during investigation, the consequential amount was directed to be refunded in cash under the transitional provision.

Conclusion: Cenvat credit was held admissible to the appellant, and the reversed amount was directed to be refunded in cash.

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