It has been clarified by the CBEC that as per Rule 2(k) of the CENVAT Credit Rules, 2004, CENVAT credit is available in respect of structural components if used as parts of Boiler. However, CENVAT credit would not be available in respect of  structural components used for laying of foundation or making of structures for support of capital goods/ Boiler.
Earlier in April, 2012 the Board had issued Circular No 964/07/2012-CX dated 02.04.2012 wherein it was clarified that structural components of Boiler which are essentially parts of the boiler would be classified under heading 8402 and  CENVAT credit would be admissible in respect of such structural components/parts (of the Boiler) for the reason that  they are not used for laying of foundation or making of structures for support of capital goods.
In view of the Circular, doubts have arisen as to whether CENVAT credit will be available on structural components used for the support of the Capital Goods.
The Board has now clarified that whether a particular structural component is a part of the Boiler or a component to make structure for supporting the Boiler is a question of facts and needs to be examined on a case to case basis,  depending on the nature and use of the said structural component as per the existing legal provisions and judicial pronouncements on the subject.

Circular No. 966/09/2012-CX, New Delhi the 18th May 2012

Sub:Clarification regarding classification of Structural Components of Boiler and Admissibility of CENVAT Credit on these Structural Components, reg-

References have been received from the field formations seeking clarification in respect of the Circular No 964/07/2012-CX issued vide F No 84/1/2011-CX.1 dated 2nd April 2012 on the above subject. In the said circular it has been clarified that structural components of Boiler which are essentially parts of the boiler are to be classified under heading 8402 and CENVAT credit shall be admissible in respect of such structural components/ parts (of the Boiler), as they are not used for laying of foundation or making of structures for support of capital goods.

2.  Clarifications have been sought as to whether in view of the said circular, CENVAT Credit will be admissible on structural components used for the support of the Capital Goods.

3. The circular dated 2nd April 2012 was issued in the context of a dispute as to whether certain structural components were to be treated as boiler parts or as goods for making structures to support the boilers.  Whether a particular structural component is a part of the Boiler or a component to make structure for supporting the Boiler is a question of facts and needs to be examined on a case to case basis, depending on the nature and use of the said structural component as per the existing legal provisions and judicial pronouncements on the subject.

4. As clearly stated in para 3 of Boards’ above circular dated 2.4.2012, it is once again reiterated that in terms of the Rule 2(k) of the CENVAT Credit Rules, 2004, while CENVAT Credit is available in respect of parts of Boiler, the same is not admissible in respect of the structural components used for laying of foundation or making of structures for support of capital goods/ Boiler.  The above clarification is in conformity with the views expressed in the judgments of the Hon’ble Supreme Court/ different benches of the CESTAT.
1. Trade, industry and field formations may be suitably informed.

1. Hindi version will follow

Yours faithfully

(Madan Mohan)

Under Secretary (CX.1)

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Category : Excise Duty (4051)
Type : Circulars (7536) Notifications/Circulars (30576)

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