2015 (10) TMI 879 - AT - Central Excise

Denial of transfer of Cenvat Credit unutilized lying in the account of M/s. Maruti Suzuki India Ltd. which was merged with Maruti Suzuki Udyog Ltd. - Held that - As there is no ban on availment of Cenvat Credit of one unit if input service pertains to both the units prior to 2012, therefore, we follow the decision of Doshion Ltd. 2012 (10) TMI 952 - CESTAT AHMEDABAD and hold that appellant is not required to reverse Cenvat Credit on ₹ 56,41,18,612/-. We further find that Cenvat Credit of ₹ 8,57,44,621/- is also denied on account of merger of Maruti Suzuki India Ltd. with Maruti Udyog Ltd. Since, both the units have been merged, therefore, appellant is entitled to transfer Cenvat Credit lying unutilized in the Cenvat Credit account of the unit merged with the main unit. Therefore, appellant is entitled to take Cenvat Credit to the extent of ₹ 8,57,44,621/- in terms of Rule 10 of the Cenvat Credit Rules 2004. - No merit in impugned order - Decided in favour of assessee.

Summary

Issues:
Appeal against denial of Cenvat Credit on common input services for two manufacturing units and denial of transfer of unutilized Cenvat Credit post-merger.

Analysis:
The appellant, a manufacturer of motor vehicles with units in Gurgaon and Manesar, appealed against the denial of Cenvat Credit on common input services for both units and the refusal to transfer unutilized Cenvat Credit from M/s. Maruti Suzuki India Ltd. to Maruti Suzuki Udyog Ltd. post-merger. The Revenue objected to the appellant availing full Cenvat Credit on common input services for the Gurgaon unit, arguing that some services pertained to the Manesar unit. Additionally, the Revenue challenged the Cenvat Credit for the Gurgaon unit post-merger due to alleged non-transfer of capital goods. A show cause notice was issued, leading to the denial of Cenvat Credit, imposition of interest, and penalties. The appellant contested these decisions before the Tribunal.

The Tribunal considered the precedent set in the case of Doshion Ltd. Vs. CCE Ahmedabad, where it was established that there was no restriction on availing Cenvat Credit for one unit if the input services were common to multiple units before 2012. Following this, the Tribunal ruled in favor of the appellant, stating that they were not required to reverse the Cenvat Credit amount. Furthermore, the Tribunal held that the appellant was entitled to transfer unutilized Cenvat Credit post-merger in accordance with Rule 10 of the Cenvat Credit Rules 2004. Consequently, the Tribunal found no merit in the impugned order, set it aside, and allowed the appeal with any consequential relief deemed necessary.