Cenvat credit eligibility for steel goods used in factory shed erection was upheld as part of factory structure.

M.S. angles, M.S. channels, chequered plates, H.R. plates and H.R. chequered coil used to erect factory sheds within the factory premises were treated as capital goods for Cenvat credit under Rule 2(b) of the Cenvat Credit Rules, 2002. The goods were regarded as used in or in relation to manufacture, and as integrated immovable components of the factory structure. On that basis, earlier tribunal authority supporting credit on similar goods was followed and the revenue challenge failed.

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Issues: Whether M.S. Angles, M.S. Channels, Chequered Plates, H.R. Plates and H.R. Chequered Coil used for erection of factory sheds within the factory qualified as capital goods for the purpose of Cenvat credit under Rule 2(b) of the Cenvat Credit Rules, 2002.

Analysis: The disputed goods were found to have been used in the erection of factory sheds situated within the factory premises. The appellate authority accepted that the goods were utilized in or in relation to manufacture and relied on earlier tribunal authority treating similar goods as eligible for credit. The goods were also treated as immovable items integrated into the factory structure, and no reason was found to disturb that factual and legal conclusion.

Conclusion: The disputed goods were eligible for treatment as capital goods for Cenvat credit purposes, and the revenue's challenge failed.

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