Structural
Components Used as Part of Boiler System Classifiable as Parts of Boiler under
Heading 8402 and CENVAT Credit Admissible
[CBEC Circular No. 966 dated 18th
May 2012]
Sub:
Clarification regarding classification of Structural Components of Boiler and
Admissibility of CENVAT Credit on these Structural Components.
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.
5. Trade, industry and field formations may be suitably informed.
F No 84/1/2011-CX.1