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2015 (10) TMI 336 - AT - Central ExciseBenefit of CENVAT credit of duty paid on various capital goods - Subject items cannot be considered to be covered by the definition of capital goods inasmuch as they are classifiable under Chapters 29, 35 and 38 - Held that:- Traps in question are required to be used for avoiding the attack by the tobacco beetles. If the same are not used, raw materials as also the final products are likely to be damaged, in which case, they would not be in a position to be cleared. The items in question, may not be strictly covered by the definition of capital goods but admittedly they are required to be used for manufacture of final product and as such can be considered as inputs. The Hon'ble Karnataka High court in the case of Rane (Madras) Ltd Vs CCE Bangalore [2007 (12) TMI 208 - KARNATAKA HIGH COURT] has allowed the CENVAT credit on universal measuring machine used by the assessee for measurement of jigs, fixtures and gauges which are intended for manufacture of intermediary products as well as measuring some of the final products. It is well settled law that where a particular process is integrally connected with the ultimate production of the goods, but for that process, manufacture of goods would be commercially inexpedient, articles required in that process would be considered as having been used in the manufacture of goods. It is nobody's case that tobacco beetle is required to be managed and if not managed the production of cigarettes cannot take place commercially, though theoretically it may be possible to do so. As such anything used for managing the tobacco beetle infestation is required to be considered as an input having been used in relation to manufacture of final products. Demand is also barred by limitation - Decided in favour of assessee.
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