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TMI Blog2023 (10) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... amalgamated - In the present case, the Unit has become a DTA after exiting from EOU status. Under Central Excise law both these units are considered as separate entities. The accumulated credit cannot be denied to both the units and the department cannot recover such credit which belongs to the appellant. The issue stands covered by the decision in the case of TECUMSEH PRODUCTS INDIA P. LTD. VERSUS C.C.,C.E. S.T., HYDERABAD-IV [ 2015 (9) TMI 1487 - CESTAT BANGALORE] where it was held that a successor DTA unit can get the transfer credit of the unutilized credit lying with its predecessor unit, which is an EOU in the present case. The demand cannot sustain and requires to be set aside. The impugned order is set aside - Appeal allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Show Cause Notice was issued proposing to disallow the credit so transferred from EOU to DTA Unit and for recovery of the same with interest and for imposing penalties. After due process of law, the original authority confirmed the demand along with interest and imposed penalties. Aggrieved by such order the appellant is now before the Tribunal. 2. The Ld. counsel Shri S. Murugappan appeared and argued for the appellant. It is submitted that there is no bar under Rule 10 to transfer the credit when the same legal entity is converting its status from EOU to DTA. The credit accumulated belongs to the appellant. Only because the status of Unit is converted from EOU to DTA, the accumulated credit which is unutilised cannot be denied to both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment s main premise is that an EOU when it is converted from EOU to DTA unit, it (successor DTA unit) cannot get the credit of balance in Cenvat account of EOU on date of its conversion to DTA unit, by way of transfer. 5.1 In this case the appellant has been running Domestic Tariff Area Unit as well as an Export Oriented Unit. When they decided to de-bond the EOU unit and necessary permissions were granted by the Special Economic Zone Authority (Development Commissioner) and for that they paid applicable duties as well. The question then arose is whether the unutilized Cenvat credit lying in the account of EOU, which was allowed de-bonding, can be transferred to its successor Domestic Tariff Area (DTA) unit. 5.1.1 The fact as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be entitled to take the balance credit lying in the Cenvat account of EOU at the time of its conversion to DTA unit. In other words a successor DTA unit can get the transfer credit of the unutilized credit lying with its predecessor unit, which is an EOU in the present case. 6. Based on above discussions and the decision of the CESTAT in GTN Exports Ltd. v. CCE (supra) the appeal is allowed with consequential benefits and when appeal succeeds in above terms penalty is also not sustainable. 6. Similar view was taken by the Tribunal in the case of Technocraft Industries India Limited 2019 (369) ELT 1144 (Tri - Mumb.) Relevant paragraph reads as under: 5. Having considered the rival submissions, we find it necessary to step ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em. Duty liability on domestic clearances confers on both the access to Cenvat credit scheme. That is not disputed by Revenue. There any dispute on the factum of exports effected by the appellant from the two facilities operated as 100% export oriented units with resultant inevitable accumulation of credit. 7. The scheme of indirect taxation requires that the tax burden is borne by the ultimate consumer, i.e. non-assessee, and all assessees in the production chain merely collect the duty for remitting to the government. At the same time, excise duties are limited to the contribution made to the manufacture of any goods; this requires that, for the proper administration thereof, each stage in the manufacturing process should be entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing authority seeks. 9. The existence of the appellant as an assessee has not been erased, substituted or subsumed at any point in time. The continued existence of the manufacturing facility is not compromised by a hiccup that is rooted in administrative orderliness. The provenance of the accumulated credit is not questioned. The statutory entitlement to regular monetization of the accumulated credit cannot be alienated; the alternative of utilization is not restricted by any condition. Denial of such utilization would have the impact of taxing the exporter as ultimate consumer and burdening the appellant with an implied duty on exports that is not authorized by law. To do so is an act illegality. Accordingly, we hold that denial of ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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