Cenvat credit on factory-used goods upheld despite objection that permanently fastened machinery was not goods for credit purposes.

Cenvat credit was allowed on disputed goods used in the factory because jurisdictional verification confirmed their actual use as inputs or capital goods. The Revenue's objection that the machinery was permanently fastened to the earth and therefore not goods for Cenvat purposes was rejected, since the Cenvat scheme permits credit on inputs used in or in relation to manufacture within the factory. The Department did not dispute that the goods failed to meet the definition of capital goods, but the verified use supported eligibility for credit. The respondent was therefore entitled to Cenvat credit and the Revenue's challenge failed.

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Issues: Whether the respondent was entitled to Cenvat credit on the disputed goods used in the factory, despite the Revenue's objection that the machinery to which they related was permanently fastened to the earth and therefore not goods for Cenvat purposes.

Analysis: The credit had been allowed on the basis of the jurisdictional range verification report confirming the actual use of the goods as inputs or capital goods. The objection that permanently fastened machinery ceased to be goods was rejected, as the Cenvat scheme permits credit on inputs used in or in relation to manufacture within the factory. The Department did not dispute that the goods failed to satisfy the definition applicable to capital goods, and the verified use supported eligibility for credit.

Conclusion: The respondent was held entitled to Cenvat credit, and the Revenue's challenge failed.

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