VAT on Capital goods

The same will be used by only Manufacturing Unit.

The VAT Act defines the Capital Goods. Not all Fixed assets are capital goods. Please refer to the VAT Act of the concerned state for details as to which are capital goods and which are not. If the Fixed Asset you have purchased paying VAT (i.e. from within the State only), and if that Capital goods are used are related to the taxable sale of goods (i.e. goods and transaction taxable either under VAT Act or the CST Act) or even exported, then that tax becomes eligible for rebating, else not.

The Section under which it can be obtained depends on the State in which your company is situated.