2016 (12) TMI 276 - AT - Central Excise

CENVAT credit - transfer of credit - whether the Respondents are eligible for the transfer of the CENVAT credit of Service Tax and raw materials availed by the sister concern, which was amalgamated with the respondents? - Held that - We find that it has been held in the plethora of decisions that physical transfer of inputs and raw material nor services are required, for transfer of cenvat credit accumulated and available in the books of sister concern on the date of amalgamation. We find no infirmity in the decision of the Commissioner (Appeals), which is upheld - CENVAT credit not allowed - appeal dismissed - decided against respondent-assessee.

Summary

Issues:
Transfer of CENVAT credit of Service Tax and raw materials from sister concern post-amalgamation.

Analysis:
The issue in this case pertains to the eligibility of the Respondents for the transfer of CENVAT credit of Service Tax and raw materials from a sister concern that was later amalgamated with the Respondents. The Commissioner (Appeals) had ruled in favor of the Respondents, allowing the transfer of the accumulated CENVAT credit. The Revenue, dissatisfied with this decision, filed an appeal challenging the order.

Upon reviewing the arguments and records, the Revenue contended that the transfer of accumulated CENVAT credit should not be allowed as the raw material stock at the sister concern's unit was nil at the time of amalgamation, and the input services for which the CENVAT credit was availed had been utilized before the merger took place.

The Tribunal, after careful consideration, noted that various decisions have established that physical transfer of inputs or raw materials is not a prerequisite for the transfer of CENVAT credit accumulated by a sister concern on the date of amalgamation. The Commissioner (Appeals) had analyzed relevant decisions in the impugned order, and the Respondents had also cited supporting cases. Consequently, the Tribunal found no fault in the decision of the Commissioner (Appeals) and upheld the same.

In conclusion, the appeal filed by the Revenue was dismissed, affirming the decision of the Commissioner (Appeals) regarding the eligibility of the Respondents for the transfer of CENVAT credit post-amalgamation. The judgment was pronounced in open court on 25.10.2016 by Mr. P.M. Saleem, Member (Technical) of the Appellate Tribunal CESTAT AHMEDABAD.