Inputs for Capital Goods: iron and steel fabrication components used in factory structures qualify, allowing Cenvat credit to be retained.

Whether iron and steel items (angles, plates, joists, beams, bars, channels) used in fabrication and erection of factory structures qualify as inputs for capital goods and thus attract Cenvat credit. Higher judicial review overturned an earlier Larger Bench position, holding that such fabricated components embedded in the earth or forming part of permanent installations qualify as inputs for capital goods; the Larger Bench decision is no longer authoritative for these facts. Result: appeal allowed and appellant entitled to Cenvat credit on the specified iron and steel items, subject to existing records.

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Issues: Whether iron and steel items (angles, plates, joists, beams, bars, channels) used in fabrication and erection of structures and equipment within the factory are eligible as inputs for capital goods and therefore admissible for Cenvat credit.

Analysis: The factual matrix records that the appellant admitted availing Cenvat credit on iron and steel items used in fabrication of conveyor systems, silos, hoppers and similar installations within the factory and maintained detailed stock and accounting records. The adjudication authority confirmed demand by relying on a Larger Bench decision that disallowed such credit. Subsequent judicial review by higher forums altered the legal position: the High Court reversed the Larger Bench on the question of eligibility of iron and steel items used in fabrication embedded in the earth, and the reasoning in turn was considered by the Supreme Court in later proceedings. Given these rulings by higher courts establishing that angle, joists, beams, bars and plates used in fabrication of structures embedded in the earth qualify as inputs for capital goods, the earlier Larger Bench decision is no longer authoritative for the present facts.

Conclusion: The appeal is allowed and the appellant is entitled to the relief claimed in respect of the Cenvat credit on the specified iron and steel items; decision in favour of the assessee.

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