Cenvat credit on paint shop fabrication goods upheld as components and accessories of Chapter 84 capital goods.

Goods used in fabricating and setting up a paint shop were treated as eligible for Cenvat credit because the paint shop was regarded as a machine or plant falling under Chapter 84. On that basis, items such as panels, angles, channels, bars and plates were held to qualify as components, spares or accessories of capital goods under Rule 2(b) of the Cenvat Credit Rules, 2002. The analysis also relied on Note 5 of Section XVI, which recognises plant and related parts for this purpose. Accordingly, the impugned goods were covered by the credit scheme and denial of credit was not justified.

---

---

Issues: Whether duty credit was admissible on goods used in fabrication and setting up of a paint shop classifiable under Chapter 84, and whether such goods could be treated as components, spares or accessories of capital goods for the purpose of Cenvat credit.

Analysis: The paint shop was treated as a machine or plant falling under Chapter 84 of the Tariff. Under Rule 2(b) of the Cenvat Credit Rules, 2002, capital goods include not only goods of Chapter 84 but also their components, spares and accessories. The fabricated items such as panels, angles, channels, bars and plates used to set up the paint shop were therefore held to answer that description. Support was also drawn from Note 5 of Section XVI, which recognises plant and related parts for this purpose.

Conclusion: The impugned goods qualified as parts, components or accessories of capital goods, and the credit could not be denied. The appeal was rejected.

---