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TMI Blog2013 (6) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Tribunal is right in allowing the accumulated Modvat Credit on Molasses, after amalgamation, for the payment of duty on Sugar without transferring the corresponding input as required under erstwhile Rule 57F(12) of CER'44? 2. Whether the Appellate Tribunal has committed an error of law in holding that the transfer of accumulated credit without transfer of input, as required under Rule 57(f)(12)?" 2. The assessee herein is a manufacturer of sugar. The by-products arising on the manufacture of sugar, namely, molasses, was again used by the assessee in the manufacture of Ethyl Alcohol. For the reasons best known to the assessee, originally, although both units are under one Management, it obtained two separate registration certificates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit amount and that they would be entitled to a transfer of credit of Rs.44,06,511/- only. Thus, the excess credit of Rs.94,62,626/- was liable to be recovered as per Rule 57I of erstwhile Central Excise Rules, 1944 read with Section 11A of the Central Excise Act, 1944. On the above allegation, penalty was also proposed to be imposed on the assessee. 3. The assessee objected to the above-said notice contending that in reality, there existed no two factories, but there is only one factory covered under Section 2(c) of the Central Excise Act, 1944; consequently, there is no such thing as transfer of one unit to the other unit. The assessee further pointed out that as the sugar unit as well as distillery unit are under the same management ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , originally, the proceedings were dropped by the Assistant Commissioner. This was taken on appeal by the Revenue before the Commissioner of Central Excise (Appeals). After elaborately quoting the Rule on the credit of duty paid on excisable goods used as inputs, the Commissioner held that consequent on the unification of two registration certificates, what was remaining unutilised available at the hands of the distillery unit could not be used for payment of duty on sugar by the distillery unit, because, sugar was not manufactured in the distillery unit. In the circumstances, holding that the credit could be taken only with reference to the inputs received, as recognised by the proviso to Rule 57-F(12), the Commissioner allowed the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted the claim of the assessee and consequently, it allowed the appeal filed by the assessee. Aggrieved by this, the present appeal has been preferred by the Revenue. 7. Learned Standing Counsel appearing for the Revenue placed heavy reliance on Sub-Rule (20) of Rule 57F as well as Sub-Rule (12) of the Central Excise Rules and reiterated the reasoning of the Commissioner of Central Excise (Appeals) that on the transfer of one unit to other unit, whatever remained unutilised not being in respect of the inputs used by the transferor unit, the question of granting any adjustment on the duty payable by the sugar unit did not arise. In the circumstances, he prayed for setting aside the order of the Tribunal. 8. Learned counsel appearing f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee in respect of two activities, which are interconnected too. In the circumstances, the assessee decided to go for one registration alone as against two registrations originally taken. This decision was in tune with the management, administration and control of two units under the same head. In the above circumstances, we do not find any logical reason to accept the plea of the Revenue that on the mere taking of a single registration as against the two registrations, there was merger or amalgamation or transfer to hold that the assessee would not be entitled to any credit adjustment on the duty payable on sugar manufactured. 11. It is a matter of record and admitted by the Revenue too, that both before and after the so called transfer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilarly positioned assessee. We agree with the decision of the Tribunal. Consequently, we reject the appeal preferred by the Revenue. We may also point out that the Commissioner of Central Excise (Appeals) having accepted the case of the assessee on the quantum of credit to the tune of Rs.44,06,511/-, had not given any reason as to why the claim of the assessee on the unutilised portion of Rs.94,62,626/- should not be available to the assessee in respect of the duty payment on sugar. Thus, going by the proviso to Sub-Rule (12) of Rule 57F of the Central Excise Rules and on facts, we have no hesitation in rejecting the revenue's appeal, thereby confirm the order of the Tribunal. 14. Accordingly, this Civil Miscellaneous Appeal stands dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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