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TMI Blog2009 (7) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... ause as to why the said cenvat credit availed on 20-12-2006 should not be demanded and recovered under the proviso to Section 11A of the Central Excise Act (hereinafter referred as the act) read with rule 14 of the Cenvat Credit Rules, 2004, interest should not be charged and recovered under section 11A of the Act and penalty should not be imposed under Section 11AC of the Act read with rule 15 of the Cenvat credit Rules; that on adjudication, the credit sought to be disallowed was confirmed along with interest, besides imposing equal penalty under section 11A of the Act, holding that the unutilized cenvat credit was transferred and availed by the appellant without physical movement of the inputs/goods. 2. Being aggrieved by the above order, the appellant has come up with the present appeal along with stay petition wherein the appellant has, inter alia, contended as under :- (i) that the order passed by the Additional Commissioner is ex-facie, untenable and unsustainable in law and is liable to be set aside; (ii) that the Additional Commissioner has erred in not appreciating the factual and legal positions explained during the PH; (iii) that it has been consistently held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 230) E.L.T. 209 (MAD), but in fact, the above decision confirms the CESTAT s view in the case of Sunpack v. Commr. - 2008 (223) E.L.T. 95 (T) = 2008 (9) S.T.R. 166 (T) inasmuch as the Hon ble Madras High Court also under para 8 has held that the rule does not require that the assessee can transfer the credit corresponding only to the quantum of inputs transferred to the new factory, but permits the assessee to transfer the available credits along with inputs and capital goods in stock at the factory to the new location ; (xi) that in response to the following case laws relied upon by the appellant - (a) Aar Aay Products v. C.C.E. - 2003 (157) E.L.T. 40 (T), (b) Apco Industries v. C.C.E. - 2004 (177) E.L.T. 647 (T) (c) New Chemi Industries v. C.C.E. - 2005 (191) E.L.T. 614 (T) (d) C.C.E. v. Dr. Reddy s Lab - 2005 (191) E.L.T. 660 (T) (e) C.C.E. v. Smithkline Beecham Consumer - 2007 (209) E.L.T. 96 (T) = 2008 (11) S.T.R. 446 (T) (f) Shree Rama Multitech v. C.C.E. - 2007 (217) E.L.T. 136 (T) the Additional Commissioner has failed to assign any reasons for rejecting the same; (xii) that as accepted by the Additional Commissioner that the inputs o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceed to take the main appeal itself for final decision. The lone issue to be decided in the present appeal is that whether it is correct on the part of the department to disallow unutilized cenvat credit of Rs. 12,40,754/- from Dadra Unit to Shindewadi Unit. The lower authority has denied the credit holding that the appellant has failed to fulfill the conditions set out in rule 10 (3) of the Cenvat Credit Rules, 2004, since the credit was transferred and availed without physical transfer of the inputs, and capital goods. Whereas the appellant claims that he is entitled to avail unutilized cenvat credit on two grounds i.e. before closure of the Dadra Unit, after informing the department, they removed the inputs as well as inputs in process on payment of appropriate duty to the Shindewadi Unit. In other words, their clearances of goods, the appellant claims, amounts to transfer of goods to the new unit and hence, fulfilled the conditions contained in rule 10 (3). In addition to the above, the appellant is contending that even otherwise, the appellant cannot be denied the cenvat credit even if the contention of the department that the appellant has not transferred the inputs or capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the new unit at Shindewadi. It was the fault of the Assistant Commissioner, Central Excise, Silvassa Division for not acting immediately on the letter of the appellant requesting for transfer of unutilized credit. It was only after more than two years from the date of the appellant s letter, the Assistant Commissioner; Silvassa Division informed the new jurisdictional officer, under whom the present unit is falling, the permission for transfer of unutilized credit was accorded and the same fact was also informed to the appellant. Under the above circumstances, it is not understood as to how the appellant can be denied the unutilized cenvat credit for their new unit. The new jurisdictional officer has slapped the appellant with a SCN alleging that the appellant has contravened the provisions of Rule 10(3) of the Cenvat Credit Rules, in as much as the appellant has not removed the goods physically to their new unit. Accordingly, the unutilized credit would not be allowable to the appellant. First of all, the appellant has removed the goods on payment of duty to the new unit. In fact, such action is not warranted on the part of the appellant as per Rule 10(3) the appellant would have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old premises. However, such provision cannot be reasonably extended to deny transfer of credit when there is physically no stock of inputs at the old premises and there is no thing available to be transferred. Accordingly, it is felt that in the instant case, the appellants are entitled to transfer of the credit as they have no stock of inputs either as such or in process at old premises. The appeal is allowed . (b) Shree Rama Multi Tech Ltd. v. C.C.E., Pondicherry - 2007 (217) E.L.T. 136 (Tri.-Chennai) - Cenvat/Modvat - Inputs - Transfer of unutilized input credit - Shifting of factory from one site to another after permission from department - No stock of inputs as such or in process at time of shifting - plea that actual or physical transfer of inputs along with capital goods is necessary for credit transfer is illogical in as much as it would mean that transfer of factory from one site to another is not permissible if inputs completely utilized in manufacture of final goods - No case of Revenue that inputs on which credit availed not duly accounted - transfer of credit to sister unit admissible - Rule 10 of Cenvat Credit Rules, 2004 [2007 (209) E.L.T. 96 (Tribunal) relied o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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