2007 (12) TMI 75 - AT - Central Excise

Assessee is shifting the factory because of non-availability of mfg. facility at that lication - sought transfer of the credit, which was lying in the balance in the statutory records - non-availability of manufacturing facility cannot be a bar for denial of Cenvat credit - stock of inputs lying in the job workers premises are entitled credit

Summary

Issues:
Appeal against order-in-appeal on ground of improper consideration of issue. Transfer of Cenvat credit due to factory relocation. Eligibility of Cenvat credit when inputs not physically found at location. Manufacturing activities outsourced to job workers. Interpretation of Rule 8 of Cenvat Credit Rules, 2002.

Analysis:
The appeal was filed by the revenue against the order-in-appeal, contending that the issue was not considered properly by the ld. Commissioner (Appeals). The case involved the transfer of Cenvat credit as the appellant shifted the factory location, seeking to transfer the credit balance under Rule 8 of the Cenvat Credit Rules, 2002. The adjudicating authority initially disallowed the credit, stating the respondent had no manufacturing activity at the current location. However, the ld. Commissioner (Appeals) set aside this decision, allowing the credit to the respondent.

The revenue argued that the inputs on which credit was availed were not physically found at the location but at the job workers' premises, questioning the eligibility of credit transfer. The consultant for the respondent explained that manufacturing was outsourced to job workers due to issues, and finished goods were transferred back to be cleared from the current location after appropriate duty payment. The Commissioner (Appeals) considered the evidence and allowed the appeal based on Rule 8 provisions.

Upon review, the Commissioner (Appeals) found that the appellant had intimated the department about the factory relocation and provided detailed stock information, indicating compliance with Rule 8 requirements. The Tribunal emphasized that non-availability of a manufacturing facility does not bar Cenvat credit, citing a relevant case. It was noted that the respondent had a manufacturing facility and stock of inputs at the job workers' premises, supporting the credit transfer.

Following the Tribunal's precedent and considering the circumstances, the appeal by the revenue was rejected. The Tribunal upheld the correctness of the impugned order, concluding that the appeal did not warrant interference. The decision was pronounced in court, affirming the allowance of the Cenvat credit transfer under Rule 8 in the case of factory relocation.