Refractories and Refractory materials
This query is : Resolved
07 October 2010
Sir
Whether Shell Thermia B is a Capital Goods as per Cenvat Credit Rules 2004 or not
Whether Shell Thermia B is a Capital Goods as per Cenvat Credit Rules 2004 or not
08 October 2010
What is the item? Does it fall inot any of the specified categories?
20 July 2025
Regarding your query on whether Shell Thermia B is classified as a Capital Goods under CENVAT Credit Rules, 2004:
Capital Goods under CENVAT Credit Rules, 2004 (Rule 2(k)) are defined as goods, such as machinery, equipment, or tools used in manufacture of final products, and generally having a life of more than one year.
For refractories and refractory materials, classification as Capital Goods depends on their usage:
If the refractory materials are fixed or installed in the factory premises and used in the manufacturing process (like lining of furnaces, kilns, reactors), they are usually treated as Capital Goods because they form part of the factory’s fixed assets.
However, consumable refractory materials or those used for repairs and maintenance might be classified as inputs, not capital goods.
Shell Thermia B is a refractory material—a special chemical used for maintenance or lining purposes.
Specific Position on Shell Thermia B:
Generally, Shell Thermia B is used as a maintenance refractory material or consumable refractory compound, not as a capital good (i.e., not machinery or equipment).
Therefore, it does not qualify as Capital Goods under CENVAT Credit Rules, 2004, but is treated as an input (raw material/consumable).
Input credit can be availed on such materials if used in manufacture or for furtherance of business, subject to normal CENVAT provisions.
Conclusion:
Shell Thermia B is NOT classified as Capital Goods under CENVAT Credit Rules, 2004 but as an input or consumable refractory material.
Capital Goods under CENVAT Credit Rules, 2004 (Rule 2(k)) are defined as goods, such as machinery, equipment, or tools used in manufacture of final products, and generally having a life of more than one year.
For refractories and refractory materials, classification as Capital Goods depends on their usage:
If the refractory materials are fixed or installed in the factory premises and used in the manufacturing process (like lining of furnaces, kilns, reactors), they are usually treated as Capital Goods because they form part of the factory’s fixed assets.
However, consumable refractory materials or those used for repairs and maintenance might be classified as inputs, not capital goods.
Shell Thermia B is a refractory material—a special chemical used for maintenance or lining purposes.
Specific Position on Shell Thermia B:
Generally, Shell Thermia B is used as a maintenance refractory material or consumable refractory compound, not as a capital good (i.e., not machinery or equipment).
Therefore, it does not qualify as Capital Goods under CENVAT Credit Rules, 2004, but is treated as an input (raw material/consumable).
Input credit can be availed on such materials if used in manufacture or for furtherance of business, subject to normal CENVAT provisions.
Conclusion:
Shell Thermia B is NOT classified as Capital Goods under CENVAT Credit Rules, 2004 but as an input or consumable refractory material.
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