2007 (5) TMI 391 - AT - Central Excise

Summary

Issues involved: Confirmation of Cenvat credit under Rule 10 of Cenvat Credit Rules, 2004, imposition of penalty under Rule 15 of Cenvat Credit Rules, 2004, and Section 11AC of the Central Excise Act, 1944.

The Appellate Tribunal CESTAT, Mumbai, in the case, dealt with the confirmation of Cenvat credit amount and Education Cess, along with the imposition of penalty under Rule 15 of Cenvat Credit Rules, 2004, and Section 11AC of the Central Excise Act, 1944.

Regarding the confirmation of the Cenvat credit, the Tribunal found that the issue revolved around the liability of the assessee concerning M/s. NOCIL as per an agreement dated 24-9-2004. The Tribunal noted that Rule 10 of the Cenvat Credit Rules, 2004 allows for the transfer of unutilized Cenvat credit in certain circumstances, such as in cases of factory transfer due to ownership change. The appellants had provided an undertaking agreeing to take over the liabilities of NOCIL, which had surrendered its registration certificate, as accepted by Customs authorities. Consequently, the Tribunal held that the appellants had fulfilled the requirements of Rule 10, making them entitled to the credit amount in question. Therefore, the confirmation of credit and education cess, along with the penalty, was set aside, and the appeal was allowed without addressing other submissions.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the Cenvat credit and Education Cess while overturning the penalty imposed under Rule 15 of Cenvat Credit Rules, 2004, and Section 11AC of the Central Excise Act, 1944. The decision was based on the fulfillment of the requirements of Rule 10 by the appellants in taking over the liabilities of NOCIL as per the agreement, thereby entitling them to the credit amount in question.