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2014 (9) TMI 683 - AT - Central ExciseWaiver of pre deposit - Eligibility for cenvat credit of various items parts and accessories, components etc. used for maintenance of the captive power plant - Held that:- For being covered by the definition of "capital goods" eligible for cenvat credit, the only points which are relevant are that the goods must be those mentioned in Rule 2(a) of CCR 2004 and should have been used in the factory of manufacture of final product and how the goods are used and whether the goods after being installed become fixed to the earth and together constitute a manufacturing plant, is not relevant. It is absolutely wrong to mix the issue of eligibility for capital goods cenvat credit of the items mentioned in Rule 2(a) of CCR, 2004 with the issue of excitability of the manufacturing plant. Therefore, just because the various items of machinery covered by Chapter 82, 84, 85 and 90 of the Tariff, pipes and tubes, tanks etc., all of which are covered by the definition of "capital goods", have been installed and after installation have become fixed to the earth power plant, the same would not cease to be the "capital goods". If a process or activity is so integrally connected to the ultimate manufacture of goods so that without that process or activity, manufacture may, even if theoretically possible, be commercially inexpedient, the goods intended for use in such process or activity would be treated as used in the manufacture of goods. The expression used in Rule 2(k) of CCR, 2004 in the definition of "input" is "used in or in relation to the manufacture of final product whether directly or indirectly", whose scope is much wider than the scope of the expression "used in the manufacture". Therefore, in our view, any activity without which the manufacture of final product, though theoretically possible, is not commercially feasible, would have to be treated as having nexus with the manufacture of final product and the inputs used in such activity would be eligible for cenvat credit. impugned order is prima facie contrary to the provisions of the law and the appellant have a strong prima facie case in their favour and the requirement of pre-deposit under section 35F in these circumstances would cause undue hardship to the appellant. Therefore, the requirement of predeposit of cenvat credit demand, interest thereon and penalty is waived for hearing of the appeal and recovery thereof is stayed during pendency of appeal - Stay granted.
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