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TMI Blog2015 (6) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... ir manufacturing unit alongwith raw material and semi finished goods to M/s. Bon Ltd. on 17/7/2005, which was by way of slump sale comprising of land, building, raw materials, packing materials and work in progress stocks. On adjudication, Ld. Adjudicating authority confirmed duty demand of Rs. 33,35,648/- under the Rule 12 & 14 of Cnvat Credit Rules, 2002 read with Section 11A(1) of the Central Excise Act, 1944 and also demanded equal amount of penalty and interest. The said demand was made in respect of inputs and semi finished goods transferred to the buyers of the unit i.e. M/s. Bon Ltd. on the ground that the said inputs were not used by the appellant in the manufacture of the final product and the same was removed to buyer M/s. Bond L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the manufacturer. The factory was sold alongwith stock of inputs and capital goods. The sold unit was on going unit and on the date of transfer of ownership the successor unit i.e. M/s. Bon Ltd used the said input in the manufacture of the final product and discharged the excise duty thereon. Part of the inputs were sold by the M/s. Bon Ltd on which excise duty was paid. It is her submission that though the factory was sold alongwith the inputs but appellant has not removed the input out of the factory, unless the input removed from the factory of manufacturer the demand of Cenvat credit is not correct. She referred to Rule 10 of Cenvat Credit Rules, 2004 according to which input as well as input credit is allowed to be transferred to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Ltd. Vs. C.C.E., Ghaziabad 4. I have carefully considered the submissions made by both the sides and perused the record. 5. In the present case, the fact is not under dispute that though the manufacturing unit was sold by the appellant to M/s. Bon Ltd. but sale is on as where is basis. Accordingly, the input in question was not removed from the factory and therefore in absence of removal of input from the factory duty demand is not sustainable. It is also not disputed that the factory was on going and after sale, the buyer, M/s. Bon Ltd was engaged in the manufacture and was assessed under Central Excise. It is also not a case that M/s. Bon has removed the input lying in the factory without payment of duty or disposed of otherwise. Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istant Commissioner of Central Excise. From the reading of the above Rule 10, it can be seen that it is permitted even to transfer the Cenvat credit to the buyer unit as well as transfer of stock of input. In this regard, the Revenue in their ground of appeal stated that since factory was partly sold therefore Rule 10 is not applicable. I do not agree with the contention of the Revenue, for the reason that there is no dispute that a manufacturing unit was sold and even manufacturing was continued after sale, there is no condition provided in Rule 10 that provision of such rules is not applicable in case where factory is partly sold. The judgments relied upon by the Ld. Counsel for the respondent are squarely applicable in the present fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/- is not relevant to this case, as M/s Bon Ltd. is neither an assessee, nor a co-noticee" or "in this case, appellant' claim that M/s. Bon Ltd. have reversed/paid Cenvat credit to the tune of Rs. 14,32,279/- being the proportionate credit on the stocks transferred by appellant to M/s. Bon Ltd was not acceptable since reversal of Cenvat credit is demanded / required to be done by the appellants" On sale of the factory, the legal rights and ownership passes to the buyer, and unless and until specifically provided to the contrary in the agreement to sale, the Cenvat Credit of the inputs also passes to the buyer, with the inputs in the form of raw materials or work in progress. Further, it has been contended by the appellants that the cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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