Cenvat credit on iron and steel used for factory fabrication and erection was allowed after the adverse precedent was reversed.

Cenvat credit on iron and steel items used to fabricate and erect conveyor systems, silos, hoppers and allied supporting structures within the factory was found admissible. The denial of credit had rested on the Larger Bench view in Vandana Global Ltd., but that precedent no longer survived because it had been reversed by the High Court and the reversal affirmed by the Supreme Court. With the relied-upon basis for disallowance removed, the items were treated as eligible inputs for manufacture, and the assessee succeeded on the credit issue.

---

---

Issues: Whether Cenvat credit was admissible on iron and steel items used in fabrication and erection of equipment and supporting structures within the factory.

Analysis: The demand had been confirmed by following the Larger Bench view in Vandana Global Ltd. That basis no longer survived because the cited Larger Bench decision had been reversed by the High Court and the reversal had been affirmed by the Supreme Court. On that footing, the iron and steel items used for fabrication and erection of conveyor systems, silos, hoppers and allied structures within the factory were treated as eligible for credit.

Conclusion: The credit was held to be admissible and the appellant succeeded on the issue.

Ratio Decidendi: Where the very precedent relied on for denying credit stands reversed, iron and steel items used in fabrication and erection within the factory may qualify for Cenvat credit as inputs for manufacture.

---