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TMI Blog2017 (5) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... ctory as a whole. When the factory covers both SFD as well as EFD, there can be no objection to maintenance of a common Cenvat account and making payment of Excise Duty for any final product manufactured in the factory. Once the two divisions have a common registration certificate as a single factory, the Cenvat credit accounts, which were maintained separately will need to be merged. After such an event there can be no objection to the SFD making use of the accumulated credit under EFD prior to issue of common Registration certificate - appeal allowed - decided in favor of appellant. - E/52444/2015-Ex [DB] - FINAL ORDER NO. 52775/2017-Ex[DB] - Dated:- 10-4-2017 - Shri M.V. Ravindran, Member (Judicial) and Shri V. Padmanabhan, Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time of merger would lapse and the same could not be utilized for payment of duty by the merged entity. Cn this basis, after issue of the Show Cause Notice, the Commissioner vide Order-in-Orjginal dated 28.01.2014 ordered recovery of the Cenvat credit of ₹ 14,11,14,058/- against the appellant company along with interest. He also imposed penalty of an amount equal to duty on them under Rule 15(2) of the Cenvat Credit Rule read with Section 11 AC of Central Excise Act, 1994 and also penalty of ₹ 5000/- under Rule 27 of the Central Excise Rule, 2002. Against this order of the Commissioner, this appeal has been filed. 2. With the above background, we heard Shri B.L. Narsimhan, Id. Advocate for the appellant as well as Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Commissioner is the authority in Chapter 2 of CBEC Manual to decide on common registration and he has to consider many factors listed in para 3.2 of that Chapter to decide. These factors and his findings are: i. Both divisions are separated by road as admitted by Shri Khosla, their Manager in his statement as quoted in Para 5.6 of OIO. ii. Interlinked manufacturing process and common raw materials: here also both divisions are not at all interlinked and major raw materials are not common. The final products are separate and not linked to each other. In fact, on this point, certain case laws cited by the tax payer can be distinguished. In Dhampur Sugar Mills case, sugar plant and distillery plant are interconnected since molas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d perused the records. The Staple Fiber Division (SFD) of the appellant has been operational since 1954. The Excel Fibre Division was subsequently established within the same premises in 2006 and took separate Central Excise Registration. However, the appellant approached the department for grant of common Central Excise Registration for both the divisions and the same was approved by the Department and the EFD became part of SFD. 6. The dispute has arisen with reference to the Cenvat credit amounting to nearly ₹ 14.11 crores, which was available in the books of EFD accounts and was subsumed into the Cenvat account of the common factory premises. This accumulated Cenvat credit was also made use of by SFD for payment of duty on fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured in the factory. 9. The department has denied the transfer of Cenvat credit balance of nearly ₹ 14 crores in EFD into the common Cenvat account citing that Rule 10 of the Cenvat Credit Rules does not cover such a case. The Id. Adjudicating authority has also cited the Supreme Court decision in the case of Rollatainers (Supra). 10. Rule 10 of CCR takes care of situations such as a manufacturer shifting his factory to another site or the ownership of the factory is transferred on account of change in ownership on account of sale, merger, amalgamation etc. We find that the facts in the present case are different. The decision of the Hon'ble Supreme Court has been rendered in entirely different circumstances wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 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 . 12. We are of the view that the decision of the Hon'ble Madras High Court is squarely applicable to the facts of the present case. By following the above decision, we come to the conclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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