Cenvat credit for factory support structures and internal railway tracks remained available before the later exclusion took effect.

Cenvat credit was available on iron and steel items used from 1 March 2008 to 30 June 2009 to fabricate supporting structures for capital goods and manufacturing equipment. Their attachment to earth or immovability did not negate their direct or indirect use in manufacturing final products. The later exclusion in Explanation 2 to Rule 2(k) of the Cenvat Credit Rules, 2004, introduced by Notification No. 16/2009-CE (N.T.), did not apply retrospectively. Railway tracks within the factory used to move raw materials and finished goods were also treated as used in relation to manufacture. Accordingly, credit on the disputed items and tracks was admissible.

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Issues: Whether Cenvat credit was available on iron and steel items, including rails, used for fabricating supporting structures and railway tracks within a cement factory.

Analysis: For the period from 01.03.2008 to 30.06.2009, iron and steel items used to fabricate structures for installation of capital goods and equipment used in manufacture were covered by the inclusive definition of inputs under Rule 2(k) of the Cenvat Credit Rules, 2004. The fact that the fabricated structures were affixed to earth or became immovable did not negate their use, directly or indirectly, in manufacture of the final product. The exclusion introduced in Explanation 2 to Rule 2(k) by Notification No. 16/2009-CE (N.T.) dated 07.07.2009 was not retrospective. Railway tracks laid within the factory for movement of raw materials and finished goods were also used in relation to manufacture.

Conclusion: Cenvat credit on the disputed iron and steel items and railway tracks was admissible to the assessee.

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