2018 (3) TMI 1050 - AT - Central Excise

Transfer of the unutilized accumulated CENVAT Credit - Rule 10 of the CCR - Held that - Rule 10 permitted the assessee to transfer the available credit along with inputs and capital goods in stock at the factory at a new location. There is no requirement under the rule that the assessee can transfer credit corresponding to the availability of quantum of inputs - transfer of credit allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
Transfer of CENVAT Credit from partnership firm to registered company.

Analysis:
The case involves an appeal by the Revenue against the order passed by the Commissioner (Appeals) regarding the transfer of CENVAT Credit from a partnership firm to a newly formed registered company. The Revenue contended that the credit should only be allowed to the extent of availability of inputs on the date of transfer. However, the Tribunal analyzed Rule 10 of the CENVAT Credit Rules, which permits the transfer of accumulated credit along with inputs and capital goods in stock at the factory to a new location. The Tribunal referred to a previous case, Sunpack Vs. Commissioner of Central Excise, where it was held that there is no requirement under the rule to transfer credit corresponding to the availability of inputs. The Tribunal also noted that the availability of credit amounting to around &8377; 58 lakhs was not in dispute. Therefore, the Tribunal upheld the decision of the Commissioner (Appeals) in favor of the assessee and rejected the Revenue's appeal.

This judgment clarifies the interpretation of Rule 10 of the CENVAT Credit Rules regarding the transfer of unutilized accumulated CENVAT Credit during the conversion of a partnership firm to a registered company. The Tribunal emphasized that the rule allows for the transfer of credit along with inputs and capital goods in stock at the factory to a new location, without mandating the transfer based on the quantum of available inputs. The decision in the case of Sunpack Vs. Commissioner of Central Excise was cited as precedent, where a similar interpretation was upheld by the Hon'ble High Court of Madras. The Tribunal's analysis focused on the availability of credit amounting to &8377; 58 lakhs, which was undisputed, leading to the rejection of the Revenue's appeal.

In conclusion, the judgment provides clarity on the transfer of CENVAT Credit during the conversion of a partnership firm to a registered company, emphasizing the provisions of Rule 10 of the CENVAT Credit Rules. The Tribunal's decision reaffirms that the transfer of credit is not contingent on the availability of inputs on the date of transfer, as long as the accumulated credit is substantiated. The case highlights the importance of adhering to the statutory provisions and established precedents in resolving disputes related to CENVAT Credit transfers in such scenarios.