2004 (10) TMI 155 - AT - Central Excise

Summary

Issues involved: Confirmation of duty demand, conditions under Rule 8(2) of Cenvat Credit Rules, imposition of penalty.

In the judgment by the Appellate Tribunal CESTAT, Mumbai, the Commissioner of Central Excise Vadodara confirmed a duty demand of Rs. 3,75,95,902/- along with interest, stating that the appellants were not entitled to credit as per Rule 8(2) of Cenvat Credit Rules after their amalgamation with other companies. Additionally, a penalty of Rs. 1 crore was imposed on the appellants.

Regarding Rule 8 of the Cenvat Credit Rules, it was noted that no prior permission from the competent authority is required before transferring credit, contrary to the ground on which the show cause notice was issued. The rule specifies that transfer of credit shall be allowed if the stock of inputs or capital goods is transferred along with the factory, and duly accounted for to the satisfaction of the Commissioner. The Tribunal cited precedents where credit remained admissible even after a change in management, emphasizing that the declaration filed pre-merger suffices for credit purposes. It was concluded that the appellants met the conditions under Rule 8(2) and were eligible for credit, leading to the impugned order being set aside and the appeal being allowed.