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2014 (10) TMI 86 - AT - Central ExciseCENVAT Credit - Notification No.18/2012-CE (NT) dt. 17.3.2012 - transfer of unutilised cenvat credit of SAD lying in balance - Held that - there is no dispute on eligibility of transfer of credit under Rule 10A of the said Rules. The adjudicating authority, already observed that there is non-compliance of the procedural requirement. In any event, we find that, according to the Revenue, the appellant would be eligible to transfer such credit on or after 1.7.2012 which they had transferred in 31.5.2012. In this context, the learned advocate submits that they have not utilized the entire credit. On a query from Bench, Ld. Advocate submits that they have utilized the credit during the relevant period about ₹ 25 lakhs. We find that the applicant transferred the credit but utilized about 4% of the credit during the material period - the words at the end of a quarter in the said Rules would apply from March 2012 quarter and there is no specific mention in the Rules that it would apply from June 2012. Applicant has made out a strong prima facie case for waiver of predeposit of entire amount of duty along with interest and penalty. Accordingly, the predeposit of entire amount of duty along with interest and penalty would be waived and its recovery be stayed till disposal of appeal. - stay granted.
Issues:
Transfer of unutilized CENVAT credit under Rule 10A of CCR 2004 - Compliance with procedural requirements - Timing of transfer - Eligibility of transfer before 1.7.2012 - Waiver of predeposit of duty, interest, and penalty. Analysis: 1. Transfer of Unutilized CENVAT Credit under Rule 10A: The case involved the transfer of SAD credit balance from one registered premise to another under Rule 10A of CCR 2004. The applicants, engaged in manufacturing excisable goods, transferred credit from Unit-II to Unit-I. The dispute centered around the compliance with procedural requirements for such transfers, specifically the entry in documents maintained under Rule 9. 2. Compliance with Procedural Requirements: The adjudicating authority noted the absence of evidence regarding the entry for transfer in the records maintained under Rule 9. While acknowledging the procedural lapse, it was observed that this was a non-compliance issue rather than a dispute over the correctness of the SAD credit balance at the transferor unit. The delivery challan issued did not contain the necessary particulars of the entry as required by Rule 10A. 3. Timing of Transfer and Eligibility: The Revenue argued that Rule 10A, inserted in March 2012, implied that the transfer could only occur after June 2012. The transfer made in May 2012 was deemed a substantial violation of the Rules. However, the applicants contended that the words "at the end of a quarter" in the Rules did not specify June 2012 as the applicable date, and they had not fully utilized the credit during the relevant period. 4. Eligibility of Transfer before 1.7.2012: The Tribunal found that there was no dispute regarding the eligibility of the credit transfer under Rule 10A. While acknowledging the procedural non-compliance, it was noted that the applicants transferred and utilized a portion of the credit before the specified date. The Tribunal agreed with the applicant's argument that the Rules did not explicitly restrict the transfer before June 2012. 5. Waiver of Predeposit: Considering the arguments presented and the lack of specific restrictions in the Rules, the Tribunal found that the applicants had a strong prima facie case for the waiver of predeposit of the duty, interest, and penalty amount. As a result, the predeposit was waived, and the recovery of the amount was stayed pending the disposal of the appeal. In conclusion, the Tribunal allowed the appeal, emphasizing the importance of compliance with procedural requirements while recognizing the eligibility of the credit transfer before 1.7.2012 based on the interpretation of the relevant Rules.
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