CENVAT credit on structural steel is available where used to repair, maintain or fabricate factory plant and machinery.

CENVAT credit is admissible on MS channels, angles and sheets used for repair, maintenance and fabrication of plant, machinery and capital goods within the factory. The earlier Larger Bench approach denying credit solely because structural steel items fell under Chapter 72 had been expressly overruled. Structural steel used for repairing and maintaining plant and machinery has a sufficient nexus with the manufacture of final products, making the disputed steel items eligible for credit.

---

---

Issues: Whether CENVAT credit was admissible on MS channels, angles and sheets used for repair, maintenance and fabrication of plant, machinery and capital goods in the factory.

Analysis: Credit had been denied solely because the steel items fell under Chapter 72 and, following the Larger Bench view, were treated as ineligible even when used in relation to capital goods or plant maintenance. That view had been expressly overruled, and the use of structural steel for repairs and maintenance of plant and machinery was treated as having the requisite nexus with manufacture of final products.

Conclusion: CENVAT credit on the disputed steel items is admissible; the issue is decided in favour of the assessee.

---