2019 (1) TMI 616 - AT - Central Excise

Transfer of accumulated CENVAT credit - shifting of the company - Rule 10 of the Cenvat Credit Rules, 2004 - requirement of intimation for credit transfer - Held that - Only the intimation is required and it is upto the satisfaction of the Asstt./Dy. Commissioner. There is no mention of getting the permission of transfer from the previous location to the new location by the concerned Central Excise Authorities, which has been made a ground for confirming the penalty against the appellant. It is on record that the intimation has been filed to both the new and old jurisdiction by the appellant - Hence, the procedural requirement under Credit Rule is duly complied with. The various credits undertaken by the appellant have been shown under ER-I Returns and the same amount has been taken as credit at the new location, which has been shown in return of the previous location - transfer of credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:

1. Transfer of CENVAT credit from one unit to another under Rule 10 of Credit Rules, 2004.
2. Allegations of wrongly availing CENVAT credit and contravention of Credit Rules.
3. Show cause notice proposing penalty under Rule 15 of Credit Rules read with relevant provisions.
4. Compliance with procedural requirements under Credit Rules for transfer of credit.
5. Discrepancy in availed CENVAT credit and submission of relevant documents.

Transfer of CENVAT Credit:
The appellant, a manufacturer of transformers, shifted its factory from Delhi to Alwar, Rajasthan, transferring accumulated unutilized CENVAT credit under Rule 10 of Credit Rules, 2004. The appellant duly intimated the transfer to both Delhi and Bhiwadi jurisdictions. The issue arose when a show cause notice alleged wrongful availing of CENVAT credit, leading to confirmation of demand by the Commissioner.

Allegations and Compliance:
The appellant contended that they followed all procedures, intimating the transfer and providing necessary documents. The appellant argued that no contravention occurred, citing relevant judgments. The Department raised objections after nine months, requesting additional documents for credit availed at the previous unit. The appellant submitted ER-I Returns for verification, showing consistency in credit amounts between locations.

Procedural Compliance and Discrepancy:
The Tribunal analyzed Rule 10 of Credit Rules, emphasizing the requirement of intimation and satisfaction of the Commissioner, not explicit permission for transfer. The Tribunal found the appellant compliant with procedural requirements, rejecting the Revenue's call for remand. It noted the consistency in credit amounts declared in ER-I Returns for both locations, concluding that the impugned order was incorrect and illegal.

Judgment:
The Tribunal set aside the impugned order, allowing the appeal with consequential benefits. The decision highlighted the appellant's compliance with procedural requirements and the absence of discrepancies in availed CENVAT credit amounts, ultimately ruling in favor of the appellant.

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