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2005 (7) TMI 225 - CESTAT, MUMBAICenvat/Modvat - Capital goods - credit on "Coal Briquette Plant" - machine for making briquettes from fine ore amounts to Manufacture Or Not - HELD THAT:- The term "used in the factory of the manufacture of the final products"….. could not mean an exclusive or only use, for the manufacture of final products of the availer of the credit. So long as the entity is required to be used in the factory of the final product manufacturer, the machinery/plant would be eligible. When read with Rule 6(4) of the Cenvat Rules, the credit could not be denied even if the use is for manufacture of non-excisable entity eg. Electricity generated in the Power House Plant in case of Power House Capital Goods. Therefore, even if the process of conversion of Iron ore 'fines' to 'Briquettes' does not amount to manufacture of excisable goods under the Central Excise law, the credit cannot be denied. After determining as above, we find the word 'used' in the definition of Capital Goods will not and cannot be interpreted to mean that it should be actually in use. The potential use by the manufacturer, at a later date would also entitle the credit. The exclusive use as already held, is not contemplated. The plant in this case is capable for use for converting the Iron or fines to be used by the appellants at a future date. The word "used" can denote be intermittent and/or use sometime in future; we find that both sides agree that the appellants are a manufacturer of declared final products Iron and Steel and have the capacity or potential to use iron ore fines also. Therefore credit as over led cannot be denied. Thus, we find no reason and deny the credit on grounds of ineligibility as determined by the lower authority. The appeal consequent to the findings is allowed after setting aside the order.
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