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Circular No.964/07/2012-CX
F. No. 84/1/2011-CX-1
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
New Delhi, dated 2
nd
April, 2012
To
All Chief Commissioners of Central Excise & Customs,
All Chief Commissioners of Central Excise,
All Directors Generals
Sir/Madam,
Subject : Clarification regarding classification of structural components of Boiler and admissibility of CENVAT
credit on these structural components - reg .
Reference has been received from Trade seeking clarification regarding classification of structural parts/components of Boiler
and admissibility of CENVAT credit on these parts/components to the buyers of the Boilers. It has been represented that
CENVAT credit is being denied to the supporting structural parts of the Boilers at the buyers' end by classifying the same under
Chapter 73 as structural parts and not as a part of Boiler. These are not being covered under the definition of inputs under the
CENVAT Credit Rules, 2004, on account of exclusion given in rule 2 (k)(iv)(B)(b). This denial is on the ground that these are
used for structures for support of Capital goods, without which the Capital goods can function.
2 The matter has been examined in the Board. The Boilers are a combination of various systems such as Coal Handling
System, Coal Feeding System, Draft Air System, Demineralization Plant, Boiler Feed Water System, Boiler Tubes, Boiler
Drums, Super Heat System, Flue Gases Treatment System and Ash Handling System etc. All these Systems work in tandem
to make a modern Boiler. These Systems comprise of many parts including structural components which are essentially the
part of Boiler by way of technical specifications. As per Section Note 4 to the Section XVI of the First Schedule to the Central
Excise Tariff Act, 1985, " Where a machine (including a combination of machines) consists of individual components (whether
separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute
together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be
classified in the heading appropriate to that function."
3. Accordingly it is clarified that those structural components which are to be used essentially as a part of Boiler System would
be classifiable as parts of Boiler only under Heading 8402 of the Tariff. It is further clarified that since these structural
components are nothing but the parts and accessories of the Boiler, they would be covered by the definition of inputs under
Rule 2(k)(iii) of the CENVAT Credit rules, 2004 (i.e. all goods for generation of electricity & steam). Further these structural
components shall not be hit by the exclusion clause to the said definition of inputs, as these are not used for laying of foundation
or making of structures for support of capital goods, but are essentially the part of said Boilers.
4. Trade, industry and field formations may be suitably informed.
5. Hindi version will follow.
Yours faithfully,
(Madan Mohan)
Under Secretary (CX1)