2012 (8) TMI 248 - AT - Central Excise

Reversal of cenvat credit during the period when assessee were DTA - two units - Merger with EOU unit - Held that - It is the claim for reversal of credit and the transferability thereof, particularly after the merger of two Units no dispute to the issue that the credit if it is allowed to DTA unit will be the very same unit i.e. Kiri Dyes and Chemicals Ltd. The identity of the assessee did not change and is merely the clubbing the unit No.1 & 2 together and the assessee remains the same and function from the same premises as a unit - the provisions of Rule 10 of Cenvat Credit Rules, 2004 would not be applicable.

Summary

Issues involved:
Eligibility of the respondent to avail cenvat credit reversed during DTA period and subsequent merger.

Analysis:
The appeal was filed by the Revenue against an order in appeal, with a cross objection by the assessee against the same order. Both issues were disposed of together as they arose from the same order. The main issue revolved around the eligibility of the respondent to avail cenvat credit that was reversed during their DTA period and later merged into a single unit. The departmental representative argued that the credit reversal by Unit II should have been rectified through a refund claim and that the transfer of credit post-merger was not permissible under the Cenvat Credit Rules. The Commissioner (Appeals) cited relevant case laws but the admissibility of credit was not in dispute; rather, the issue was the reversal and transfer of credit post-merger.

The first appellate authority found that the identity of the assessee did not change despite the merger of units, and the assessee continued to function from the same premises. It was concluded that the provisions of Rule 10 of the Cenvat Credit Rules were not applicable in this case, especially considering the factual aspects and the timing of the controversy before September 2009. The Tribunal concurred with the views of the Commissioner (Appeals) and upheld the impugned order as correct and legal, rejecting the appeal.

In summary, the Tribunal affirmed that the reversal and transfer of cenvat credit by the respondent post-merger of units did not violate the Cenvat Credit Rules, as the identity of the assessee remained the same, and the factual aspects supported the eligibility of the respondent to avail the credit. The decision was based on the understanding that the merger did not alter the underlying eligibility criteria for cenvat credit, and the provisions of Rule 10 were not applicable in this context.