2013 (10) TMI 21 - HC - Central Excise

Transfer of Cenvat Credit on transfer of capital goods - Rule 10 - Reversal of CENVAT Credit - Revenue was of the view that the appellant did not clear the capital goods under the provisions of Rule 3(5) of the Cenvat Credit Rules, 2004 by reversing applicable Cenvat credit Held that - Since factory at Roorkee was not operating under Cenvat Scheme, therefore, finding of the learned Tribunal that in the present case no transfer of credit was possible because the factory at Roorkee was not operating under Cenvat Scheme - Rule 10 cannot be read as a provision enabling removal of capital goods from one factory of a manufacturer to another factory of the manufacturer where Cenvat Scheme was not applicable, seems to be justified - Therefore, there was no jurisdictional or legal error in the order. - Decided against the assessee.

Summary

Issues: Challenge to order of Customs, Excise & Service Tax Appellate Tribunal regarding Cenvat credit on shifting of factory from one location to another.

The High Court judgment pertains to an appeal challenging an order by the Customs, Excise & Service Tax Appellate Tribunal regarding the entitlement to Cenvat credit upon shifting a factory location. The appellant had relocated their factory from Faridabad to Roorkee-Haridwar, leading to a demand for payment under Rule 3(5) of the Cenvat Credit Rules, 2004. The appellant contended that Rule 10 entitled them to the credit due to the relocation. However, it was established that the factory at the new location was not operating under the Cenvat Scheme, rendering Rule 10 inapplicable. The Tribunal's decision, which stated that no transfer of credit was feasible as the new factory was not under the Cenvat Scheme, was deemed justified. The judgment emphasized that Rule 10 does not allow for the transfer of capital goods to a factory where the Cenvat Scheme is not in place, thereby upholding the Tribunal's ruling. Consequently, the appeal was found to lack merit and was dismissed.

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