Availing of cenvat credit on PARTS of Capital Goods

[G GOSWAMI]

Since long we are availing Cenvat credit on PARTS' of Capital goods without any objection.

But recently EA-2000 Audit has raised objection for availing credit on 'PARTS' of Capital goods falling other than Chapter 84,85,82 &90 since the word 'PARTS' is not covered in the defination of Capital Goods under Rule 2(a)(A) of CCR. More over Air Circulator/Pedastal Fan of Ch.84 essential  in our manufacturing unit to cool the machines and to maintain the ambient of the manufacturing area are also not being allowed since they are not attached/parts/component of the CapitAl Goods/Machines. Kindly enlighten with your valued opinion.

Regards,

G.GOSWAMI

[YAGAY andSUN]

Anything including capital goods which is being used in the factory premises and essential to maintain humidity etc are covered under the purvies of CENVAT credit.

AI Summary

Cenvat credit on parts: eligibility covers goods used in factory premises essential for production environment maintenance. Availability of Cenvat credit on parts of capital goods turns on their use in the factory premises and whether they are essential to the manufacturing process or to maintaining the manufacturing environment; items used to maintain humidity or cooling supportive of production operations are treated as within the scope of claimable Cenvat credit, notwithstanding that the term 'parts' may not be expressly listed in the rule defining Capital Goods.