Circular No 966/09/ 2012-CX dt 18 May 2012. on CENVAT Credit on Structural Components of Boiler

Clarification regarding classification of Structural Components of Boiler and Admissibility of CENVAT Credit on these Structural Components

A. Issue:

Clarification in respect of the Circular No 964/07/2012-CX issued vide F No 84/1/2011-CX.1 dated 2^nd April 2012 stating that

1.Structural components of Boiler which are essentially parts of the boiler are to be classified under heading 8402 and

2.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.

B. Clarification:

The circular dated 2^nd April 2012 was issued in the context of a dispute    as to

1. Whether certain structural components were to be treated as boiler parts or as goods for making structures to support the boilers.

2. 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.

C. Conclusion:

            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,

a. While CENVAT Credit is available in respect of parts of Boiler,

b. But 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.