2019 (10) TMI 580 - AT - Central Excise

Transfer of CENVAT credit - de-bonding of 100% EOU and conversion to DTA unit - whether CENVAT Credit lying in balance in the books of account of 100% EOU as on the date of debonding, could be transferred to the DTA unit? - HELD THAT - The issue has been considered by this Tribunal in series of judgments viz. TECHNOCRAFT INDUSTRIES (INDIA) LTD VERSUS COMMISSIONER OF CENTRAL EXCISE THANE I 2018 (12) TMI 8 - CESTAT MUMBAI , TECUMSEH PRODUCTS INDIA P. LTD. VERSUS C.C.,C.E. S.T., HYDERABAD-IV 2015 (9) TMI 1487 - CESTAT BANGALORE , M/S JOHN DEERE INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-III 2015 (10) TMI 844 - CESTAT MUMBAI and COMMISSIONER OF CENTRAL EXCISE THANE - 1 VERSUS SEQUENT SCIENTIFIC LIMITED 2018 (4) TMI 590 - CESTAT MUMBAI - It has been consistently held by the Tribunal in all these cases that the CENVAT Credit lying in balance as on the date of de-bonding of 100% EOU and conversion to DTA unit, could be transferred to the DTA unit and be utilised by the said unit. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Transfer of CENVAT Credit from 100% EOU to DTA unit upon de-bonding.

Analysis:
The appeal was filed against OIO No.07/ANS-07/Jubilant/Th-I/2012, passed by the CCE, Thane-I. The Appellants were initially a 100% EOU and later opted to become a DTA unit. Upon de-bonding on 18.12.2011, the Appellant had CENVAT Credit balance of ?1,23,82,459/-, with ?2,84,635/- utilized for clearances. A Show Cause Notice was issued for recovery of the remaining credit, leading to the present appeal.

The Appellant argued that post-conversion to a DTA unit, retaining the same Central Excise registration should allow the transfer of the CENVAT Credit balance. Citing relevant judgments, the Appellant contended that the issue of admissibility of such credit upon conversion is well-established. The Revenue supported the findings of the learned Commissioner (Appeals).

After considering both sides and reviewing the records, the Tribunal focused on whether the CENVAT Credit balance from the 100% EOU could be transferred to the DTA unit upon de-bonding. Relying on previous judgments like Technocraft Industries (India) Ltd, Tecumseh Products India P.Ltd, John Deere India Pvt. Ltd, and CCE, Thane-I Vs Sequent Scientific Ltd, the Tribunal held that such credit transfer is permissible. The Tribunal found the impugned order to be against established precedents and set it aside, allowing the appeal with consequential relief as per law.