TMI Blog2023 (12) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... e annexed to 11.3, it is very much clear that only on the credits accumulated from input services, transfer was effected and Rule 10(3) has not dealt with such a situation, since it deals with stock of inputs or the capital goods. However, going by sub-Rule-2 it is manifestly clear that entire CENVAT Credit lying unutilised in the account of the business unit is to be transferred to the new business unit and the same is fortified by the fact that sub-Rule-3 had not restricted availment of credits on input services which were only available with the transferor business unit - there are no irregularity in the order passed by the Adjudicating Authority and, therefore, the observation made by the Commissioner (Appeals) in para 15 of the order t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004 by the Commissioner of Customs, Central Excise GST (Appeals), Nagpur on the ground of its erroneous availment is assailed in this appeal. 2. Facts of the case, in a nutshell, is that Appellant partnership firm had taken over a proprietorship concern of one of the partners alongwith its assets and liabilities including unutilised CENVAT Credit available as closing balance of the proprietorship concern. The said CENVAT Credit of Rs.10,84,210/- was transferred on the basis of Rule, 10 of CENVAT Credit Rules, 2004 but objection was raised by the Department for non-compliance of sub-Rule 3 of Rule 10 that dictates that stock of inputs including those in process and capital goods are to be duly accounted to the satisfaction of the Deput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hange in ownership or on account of sale, merger, amalgamation, lease or transfer of the business to a joint venture with the specific provision for transfer of liabilities of such business, then, the provider of output service shall be allowed to transfer the CENVAT credit lying unutilized in his accounts to such transferred, sold, merged, leased or amalgamated business. (3) The transfer of the CENVAT credit under subrules (1) and (2) shall be allowed only if the stock of inputs as such or in process, or the capital goods is also transferred along with the factory or business premises to the new site or ownership and the inputs, or capital goods, on which credit has been availed of are duly accounted for to the satisfaction of the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondition/stipulation is prescribed in the rule that requires that the input services should also be accounted for to the satisfaction of the Deputy/Assistant Commissioner. In the instant case, I find that the credit of Rs.10,84,210/- availed by the Noticee, which was lying unutilized in the account of the transferred proprietorship concern, pertains to input services only and not the inputs or capital goods, accounting of which is envisaged in the rule. This is borne out from the Chart below Para No. 9 of the Noticee s reply to the show-cause notice which is reproduced below for sake of clarity:- xxx 11.4 From the above chart, it is seen that the credit availed by the Noticee pertains only to input services and does not pertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the fact that sub-Rule-3 had not restricted availment of credits on input services which were only available with the transferor business unit. This being so, I find no irregularity in the order passed by the Adjudicating Authority and, therefore, the observation made by the Commissioner (Appeals) in para 15 of the order that Rule, 10(3) of the CENVAT Credit Rules, 2004 permits CENVAT Credit of inputs or capital goods alone to be transferred is not inconformity to the law. 5. Judicial decision on this issue is consistent from CESTAT up to the level of Hon'ble Apex Court that Rule, 10 does not require that Assessee can transfer the credit corresponding only to the quantum of inputs transferred to the new factory since it permits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of credit laid down under Rule 10(3) and applicable to input and capital goods, in my opinion, is unwarranted and incorrect when input service credit is transferred. 6. In view of the consistent decisions of this Tribunal that has been affirmed by the Hon'ble Supreme Court and in carrying forward the judicial precedent set on the issue and having regard to the fact that no stipulation is available under Rule, 10 for transfer of credit accumulated from input services, the following order is passed. THE ORDER 6. The appeal is allowed and the order passed by the Commissioner of Customs, Central Excise GST (Appeals), Nagpur vide Order-in-Appeal No. NGP/EXCUS/000/APPL/153/19-20 dated 23.02.2020 is hereby set aside, with cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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