2012 (1) TMI 114 - AT - Central Excise

Availment of CENVAT Credit - Amalgamation of companies - Held that - there is no dispute as regards amalgamation of M/s. Eusa Pigments Pvt. Limited, located at Plot No. 6105, 6107 and 6111, GIDC to M/s. Heubach Colours Pvt. Limited situated at Plot No. 6105, 6107 and 6111, GIDC, Ankleshwar. It seems that the appellant has transferred the credit to the same Company situated at the different plots. In the absence of any dispute as regards the amalgamation of the companies, provisions of Rule 10 of Cenvat Credit Rules, 2004 would clearly apply and the appellant s factory at Heubach Colour Pvt. Limited at Plot No. 6105, 6107 and 6111, GIDC, Ankleshwar is eligible to avail Cenvat credit. In view of this, to meet the ends of justice, we direct the appellants to reverse the Cenvat credit taken at Heubach Colours Pvt. Limited located at Plot No. 9003-9010, Phase-IV, GIDC Ankleshwar and permit them to take the credit of the same amount in Heubach Colour Pvt. Limited located at Plot No. 6105, 6107 and 6111, GIDC, Ankleshwar. - Decided partly in favour of assessee.

Summary

Issues:
Transfer of unutilized Cenvat credit in amalgamated companies.

Analysis:
The Appellate Tribunal CESTAT Ahmedabad heard a stay petition against an order-in-appeal, finding no executable order to stay. The Tribunal dismissed the stay petition by the assessee. During the hearing, the Tribunal observed that the appeal itself could be disposed of promptly due to its narrow scope. The Tribunal considered the submissions and the findings of the first appellate authority regarding the transfer of unutilized Cenvat credit in two amalgamated companies. The first appellate authority cited Rule 10(1) of Cenvat Credit Rules, 2004, stating that unutilized credit could be transferred to the new owner within the same factory. The authority also referred to Rule 10(3), which allows the transfer of credit when inputs or capital goods are moved along with the factory to a new site. The Tribunal noted that no such transfer occurred in the case at hand, making the transfer of credit to a different factory improper and unsustainable.

The Tribunal emphasized that since there was no dispute regarding the amalgamation of the companies, Rule 10 of Cenvat Credit Rules, 2004 applied. The appellant had transferred the credit to the same company at different plots, which was not in line with the rules. To ensure justice, the Tribunal directed the appellants to reverse the Cenvat credit taken at the incorrect location and allowed them to take the credit at the eligible factory. Consequently, the appeal was disposed of accordingly. The judgment provided a detailed analysis of the legal provisions and the specific circumstances of the case, leading to a clear directive for the appellants to rectify the transfer of unutilized Cenvat credit in compliance with the rules and regulations.