Cenvat credit on fabrication materials and delayed availment upheld; immovable capital goods did not defeat eligibility.

Chartered Engineer's certificate could not be rejected on remand where the order merely repeated earlier findings without independent appreciation, making the rejection unsustainable. HR/MS/SS plates used to fabricate chimneys, ducts, pipes, storage tanks and supporting structures of capital goods were eligible for Cenvat credit because Rule 2(k) covered inputs used in or in relation to manufacture and Rule 2(a) treated such items as capital goods; immovability of the fabricated structure was not decisive. Credit also could not be denied merely because it was taken after delay, as the relevant Cenvat Credit Rules did not prescribe a specific time limit for availment on inputs. The demand and penalty were therefore set aside.

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Issues: (i) Whether credit could be denied on the ground that the Chartered Engineer's certificate was not properly considered after remand. (ii) Whether HR/MS/SS plates used in fabrication of chimneys, ducts, pipes, storage tanks and support structures of capital goods were eligible for Cenvat credit. (iii) Whether Cenvat credit could be denied on the ground of delayed availment.

Issue (i): Whether credit could be denied on the ground that the Chartered Engineer's certificate was not properly considered after remand.

Analysis: The remand required reconsideration of the Chartered Engineer's certificate in its correct perspective. The impugned order merely reiterated earlier rejection without independent appreciation of the certificate. The prior reasons for rejection had already been found inadequate, and the certificate was not properly dealt with on remand.

Conclusion: The rejection of the Chartered Engineer's certificate was unsustainable.

Issue (ii): Whether HR/MS/SS plates used in fabrication of chimneys, ducts, pipes, storage tanks and support structures of capital goods were eligible for Cenvat credit.

Analysis: Rule 2(k) of the Cenvat Credit Rules, 2004 covers goods used in or in relation to manufacture and also goods used in the manufacture of capital goods used in the factory. Rule 2(a) specifically includes items such as chimneys, pipes, tubes, fittings and storage tanks as capital goods. Immovability of the resultant structure is not decisive where the goods are used in fabrication of capital goods. The plates used for chimneys, ducts, pipes, storage tanks and supporting structures therefore fell within the credit scheme.

Conclusion: Cenvat credit on the disputed HR/MS/SS plates was admissible.

Issue (iii): Whether Cenvat credit could be denied on the ground of delayed availment.

Analysis: Rule 4(1) of the Cenvat Credit Rules, 2002 and 2004 was treated as enabling in nature and no specific time limit was prescribed for availment of credit on inputs. Mere lapse of time between receipt of goods and availment of credit could not, by itself, justify denial.

Conclusion: Credit could not be denied on the ground of delayed availment.

Final Conclusion: The demand and penalty were set aside because the disputed credit was held admissible and the limitation objection failed.

Ratio Decidendi: Goods used in fabrication of capital goods eligible for Cenvat credit remain inputs for credit purposes even if the fabricated capital goods are immovable, and no denial can be sustained merely because credit was taken later in the absence of a prescribed time limit.

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