TMI Blog2013 (7) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal is allowed – Decided in favor of Assessee. - E/676 & 677/08 - A/199-200/13/EB/C-II - Dated:- 26-2-2013 - S S Kang And S K Gaule, JJ. For the Appellant : Shri Vipin Kumar Jain, Adv with Shri Vishal Agarwal, Adv For the Respondent :Shri K.S.Mishra, Addl.Commr.(A.R.) Per : S K Gaule : Heard both sides. 2. The issue involved in these appeals is common and hence they are taken up together for disposal. The appellants filed these appeals against the impugned order dated 31/03/08 passed by the Commissioner of Cen.Excise, Navi Mumbai whereby the ld. Commissioner has disallowed the Cenvat credit amounting to Rs.2,01,49,097/- and equal amount of penalty on the appellant unit at Dolvi and appellant unit at Kamothe in each c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat even after transfer of all inputs, work in progress to Dolvi, the Kamothe unit had an unutilized Cenvat balance of Rs.2,01,49,097/-. The credit which had accumulated at Kamothe was on account of the fact that the appellants earlier had a factory at Taloja (this unit commenced business on 16.4.2002) and the same was shifted to Kamothe along with unutilized credit balance of Rs, 2,01,49,097/- in April 2005. The credit which had accumulated at the Taloja unit was on account of exports made under Bond from that u nit. The unutilized balance lying at Kamothe which was transferred to Dolvi was out of the credit which was transferred to it from Taloja. 4.1 As far as the findings of the ld. Commissioner in para 16 of the order that the Kamoth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vat has been availed on any input or capital goods the same should also be transferred. The appellants also submitted that the credit which was transferred had undisputedly got accumulated on account exports under bond by the Taloja unit. 5. The contention of the department is that the appellants closed their unit at Kamothe and removed all its inputs, both as such and in process to their unit at Dolve on payment of duty equal to the credit availed on the inputs which is not in dispute. The contention is that however, after passing on the credit available on the said goods to their unit at Dolve, they are left with the balance of Rs. 2,01,49,097/- in their credit account. This credit was transferred by the unit at Taloja to their unit at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants unit at Kamothe. 5.2 The contention is that the sub-Rule (1) of Rule 10 allows a manufacturer to transfer the unutilized credit in its records only when he shifts his factory to another site as stipulated in sub-rule (3) ibid. Without shifting plants and machinery to the new location, a manufacturer cannot be considered to have shifted his factory within the meaning of sub-rule (3) supra. The shifting of a factory contemplates shifting of entire manufacturing operations undertaken with the aid of plant and machineries at the earlier location to the new location. Without shifting plant and machinery it cannot be construed that the factory has been shifted. In the instant case, no plant and machinery has been shifted from the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal order in case of Dr. Reddy's Laboratories Ltd. reported in 2005 (191) ELT 660 (Tri-Chennai), wherein inadmissibility of Cenvat Credit on input was upheld as the one factory was amalgamated into another. There is no such amalgamation in this case, therefore, this case law is also not applicable. 6. We have carefully considered the submissions and perused the records. The department has sought to deny transfer of unutilized credit of Rs, 22,01,49,087/- [ sic ] which the appellants have transferred under the provision of rule 10 Cenvat Credit Rules, 2004 which is reproduced hereunder for reference of convenience:- Rule 10. Transfer of CENVAT credit.- (1) If a manufacturer of the final products shifts his factory to another site ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also transferred along with the factory and the inputs or capital goods on which credit has been availed of are duly accounted for to the satisfaction of Dy. Commissioner/Asstt. Commissioner of Central Excise. The capital goods which were on lease were returned by the appellants to its owner, is not in dispute. Further on perusal or para 16 of the impugned order we find that the appellant shifted all their inputs both as such or in process, and its finished goods to their unit at Dolvi on payment of duty equal to the credit availed on inputs. We find that the department case is only that the capital goods has not been transferred alongwith inputs. It is pertinent that Rule 10(3) uses the expression inputs or capital goods and not inp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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