Cenvat credit on capital goods

I had a doubt as regards claming of cenvat credit on capital goods. In case of company engaged in manufacture of Sponge Iron, the capital goods purchased for erection of sponge iron plant falls under various chapter headings including 37,73,28, etc. Can I claim cenvat credit on the same? If yes, what is the logic for that since none of said goods fall under chapter 82,84,90 or 68.

1. Is that all those goods are brought at site and assembled there so as to bring a plant into existence which is nothing but Integrally connected machines. Does Sponge Iron Plant as such fall under Chapter 82 so that I can claim benefit of notification no 67/95 since I have used all the goods as inputs in the manufacture of sponge iron plant?

2. Or IS that I can claim cenvat only on those goods which have HSN classification 82,84,85,68, etc as included in definition of capital goods and cannot claim on other goods which though are part of plant but have tariiff classification other than those specified in definition.

3. or IS that all such goods are parts, components and tools?

 

3.

Replies (2)

Capital goods shall strictly fall under the specified chapter headings in order to qualify for cenvat cerdit. Goods falling gunder other heads eventhough used as plant or machinery are not eligible for cenvat credit. However, componenets and spares of eligible capital goods though fall under different heading may qualify for cenvat cerdit. For captive manfacture of plant , benefit of noti.67/95 can be availed. Whether the resultant plant falls under 82,  has to be examined.

Sponge Irom Plant and Power Plant are not capital goods since they are assemblies of various machineries and I doubt whether they will be separately classified in CETA. Does It mean that any goods used as a part of plant but not classified under eligible chapter are not eligible for cenvat credit. For e.g., Kiln used in sponge iron plant is used for heating up iron ore but the same is classified under chapter 73. Major part of the process involved in manufacture of sponge iron is carried in the kiln. Does it mean that I cannot claim credit of duty paid on the same.

Since the ultimate plant do not find place in CETA, does it mean that the kiln cannot be treated as parts of plant?

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