CENVAT credit on structural and construction materials for plant setup allowed where items support machinery in manufacturing

CENVAT credit was held admissible on capital goods and construction materials used to set up a dry process cement manufacturing plant. The court applied earlier binding rulings on the same assessee and identical questions, holding that structural items and related materials used for fabrication or support of machinery in the manufacturing setup qualify for credit. Immovability by itself was not treated as a disqualifying factor, and the issue was considered settled by prior decisions. The answer was therefore in favour of the assessee and against the Revenue.

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Issues: Whether CENVAT credit was admissible on capital goods and construction materials used in the setting up of a dry process cement manufacturing plant.

Analysis: The appeal was decided by following earlier binding decisions on the same assessee and on identical questions concerning the treatment of structural items and related materials used in the erection of plant and machinery. The legal position applied was that such materials, when used for fabrication or support of machinery in the manufacturing setup, are eligible for CENVAT credit and immovability is not a disqualifying factor by itself. The issue was treated as no longer res integra in view of the earlier rulings relied upon.

Conclusion: The assessee was held entitled to CENVAT credit on the capital goods used in the dry process cement manufacturing plant, and the answer to the question was in favour of the assessee and against the Revenue.

Ratio Decidendi: Materials and structural items used for erection, fabrication, or support of machinery in a manufacturing plant are eligible for CENVAT credit, and immovability alone does not bar such credit.

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