2015 (3) TMI 290 - AT - Central Excise

Waiver of pre deposit - CENVAT Credit - Whether at the time of converting from 100% EOU to DTA, the applicant is eligible to avail the accumulated cenvat credit lying unutilized in 100% EOU to their DTA unit - Held that - Following the Tribunal's decision (2011 (3) TMI 632 - CESTAT, BANGALORE), we waive the predeposit of entire amount of duty along with interest and penalty and stay its recovery till disposal of the appeal - Stay granted.

Summary

Issues:
Whether the applicant, engaged in the manufacture of Pistons, is eligible to avail the accumulated cenvat credit lying unutilized in 100% EOU to their DTA unit upon conversion from EOU to DTA.

Analysis:
The judgment revolves around the issue of whether the applicant, a manufacturer of Pistons, can avail the accumulated cenvat credit when converting from a 100% Export Oriented Unit (EOU) to a Domestic Tariff Area (DTA) unit. The Tribunal examined the provisions of Rule 10 of the Cenvat Credit Rules, 2004, and found no exclusion for availment of accumulated cenvat credit on such conversion. The Tribunal cited previous decisions in similar cases, including Technocrat Industries (India) Ltd. Vs CCE Thane and Tecumseh Products India P. Ltd. Vs CCE Hyderabad, to support their view. The order of Tecumseh Products India highlighted that the credits taken by the 100% EOU were on duty paid documents and procurements, and after de-bonding, the credit was allowed to be transferred to the DTA unit. It was noted that the EOU and DTA unit were part of the same entity, and if the credit was not transferred, the Revenue would have to refund the amount. The Tribunal considered the Board's circular dated 23-9-2004 applicable in this case and concluded that the appellant had made out a prima facie case for waiver of the adjudged demands. Consequently, the Tribunal waived the predeposit of the duty amount, interest, and penalty, staying its recovery until the appeal's disposal.

In conclusion, the judgment clarifies that there is no provision excluding the availment of accumulated cenvat credit when converting from a 100% EOU to a DTA unit. The decision is supported by previous tribunal rulings and emphasizes the entity's continuity between the EOU and DTA units. The Tribunal's analysis underscores the importance of allowing the transfer of cenvat credit to ensure fairness and compliance with the relevant rules and circulars.