Cenvat credit on capital goods used in EPCC projects remains admissible even when the installed plant becomes fixed to earth.

Cenvat credit was considered for capital goods used in erection, installation and commissioning of an EPCC project. The analysis states that Rule 2(a) of the Cenvat Credit Rules, 2004 covers specified tariff items used in the factory, and credit cannot be denied merely because the goods were brought by contractors or because the installed plant became fixed to earth. Relying on the appellant's earlier case, the text notes that ownership at the time of receipt is not a condition for credit and that the immovable character of the finished plant does not by itself defeat eligibility. The conclusion is that Cenvat credit was admissible and denial of credit was unsustainable.

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Issues: Whether Cenvat credit on capital goods used for erection, installation and commissioning of the EPCC project was admissible when the installed plant became fixed to earth and the goods had been brought by contractors for turnkey execution.

Analysis: The dispute turned on Rule 2(a) of the Cenvat Credit Rules, 2004, under which goods covered by the specified tariff chapters and used in the factory qualify as capital goods. The earlier decision in the appellant's own case had already held that there is no requirement that capital goods must be owned by the manufacturer at the time of receipt, and credit cannot be denied merely because the installed equipment becomes part of a plant fixed to earth. The same reasoning applied to the present period, and the contrary view that an immovable plant is non-excisable did not defeat credit otherwise available on capital goods used in the factory.

Conclusion: The appellant was entitled to avail Cenvat credit and the denial of credit was unsustainable.

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