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2019 (11) TMI 299 - AT - Central ExciseCENVAT Credit - transfer of credits from one unit to another - inputs meant for use in the manufacture of these computers - IBMI was amalgamated with IBM Global Service India Pvt. Ltd. (IGSI) as per the scheme of amalgamation - unconditional exemption notification No.23/2004-CE (as amended) - it is alleged that the availment of credit attributable to the inputs lying in stock as such or contained in the finished goods / semi-finished goods when the computers became exempt w.e.f. 09.07.2004 is irregular - transitional credit - Rule 11 (3) of CCR 2004 - whether they are entitled to cenvat credit taken by the predecessor unit under Rule 10 CCR 2004 or such transfer is invalid in view of Rule 10 (3) of CCR 2004? Reversal of CENVAT Credit - inputs lying unutilized in the cenvat credit account or contained in the inputs lying in stock or final products lying in stock on the day when the final products becomes fully exempt - Rule 11 (3) of CCR 2004 - HELD THAT:- Rule 11 (3) of CCR 2004 specifically provides for such a reversal. This sub rule was inserted from 1.3.2007. There is nothing on record for us to believe that this sub rule had retrospective application. In the absence of any specific provision, fiscal statutes are only presumed to have prospective application - in respect of exemptions based on the value or quantity of clearances in a financial year sub rule (2) of Rule 11 had always provided for such reversal. The present case does not pertain to exemption based on value of clearances - the demand for reversal of the cenvat credit is without any authority of law applicable during the relevant period. After the introduction of Rule 11 (3) by Notification No.10/2007 dt 1.3.2007 the Tax Research Unit of CBEC has issued Circular No.334/1/2007-TRU dt. 28.2.2007 clarifying that it will come into effect immediately. The letter does not suggest that Rule 11 (3) was supposed to have retrospective effect. Therefore, we find that it has never been the intention to give retrospective application to Rule 11 (3). In consequence, demand on this count along with interest and penalties on this account needs to be set aside. Demand on account of transfer of cenvat credit - HELD THAT:- It is clear from the details narrated in the SCN and the impugned order that all assets and liabilities of the previous entity have been passed on to the successor entity. Under these circumstances, the allegation that there is no evidence to satisfy the Asst. Commissioner or Deputy Commissioner of Central Excise that stock of inputs as such or in process or the capital goods have also been transferred to the successor entity is, at best, far fetched. The satisfaction of AC or DC or otherwise should also be based on same cogent reasons - there are no reasons or evidence because of which the Asst. Commissioner or Deputy Commissioner has come to the conclusion that the inputs or capital gods have not been transferred to the successor unit when the entire business itself has been transferred at the very same premises to the successor entity - Demand set aside. Appeal allowed - decided in favor of appellant.
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