Cenvat credit on fabrication plates upheld where materials formed components and accessories of plant machinery.

HREC sheets, G.P. sheets and plates used in fabrication, repair and maintenance of machinery in a sugar manufacturing plant were treated as eligible capital goods because they had a specific functional role in hoppers, troughs, columns, crystallizers, sulphur burner, turbine and other plant machinery. They were regarded as components, spares or accessories falling under Chapter 84, and the conclusion was supported by earlier Tribunal rulings and the principle that MS/SS plates essential to plant and machinery form an integral part of the manufacturing process. Cenvat credit on the goods was therefore admissible under Rule 2(b)(iii) of the Cenvat Credit Rules, 2002.

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Issues: Whether Cenvat credit was admissible on HREC sheets, G.P. sheets and plates used in fabrication, repair and maintenance of machinery, as capital goods under Rule 2(b)(iii) of the Cenvat Credit Rules, 2002.

Analysis: The goods were found to have specific functional use in the assessee's sugar manufacturing plant, including use in hoppers, troughs, columns, crystallizers, sulphur burner, turbine and other machinery. On that basis, they were treated as components, spares or accessories used for fabrication, repair and maintenance of machinery falling under Chapter 84, and therefore as eligible capital goods. The conclusion was reinforced by earlier Tribunal decisions on similar items and by the principle that MS/SS plates essential to the plant and machinery form an integral part of the manufacturing process.

Conclusion: Cenvat credit on the impugned goods was admissible to the assessee under Rule 2(b)(iii) of the Cenvat Credit Rules, 2002.

Ratio Decidendi: Goods specifically shown to be used as components, spares or accessories in the manufacture or fabrication of plant and machinery are eligible for Cenvat credit as capital goods.

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