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2022 (2) TMI 790 - AT - Central ExciseCENVAT Credit - transfer of unutilized credit, on shifting of factory - factory is closed down at Bangalore and appellant confined the manufacturing activity to Puducherry unit, there is no merger or transfer of units - Rule 10 of CENVAT Credit Rules, 2004 - HELD THAT:- Rule 10 of CEVAT Credit Rules, 2004 provides for transfer of unutilized CENVAT credit in the case of sale, merger, amalgamation, transfer of unit etc. In the present case, the appellant had closed the factory at Bangalore and transferred the inputs lying in stock to their unit at Puducherry. They then requested for transfer of the unutilized credit availed on inputs lying as balance in their unit at Bangalore. The request for transfer of CENVAT credit has been denied mainly on two grounds. (i) The closing down of the factory at Bangalore and the shifting of inputs lying in stock to the Puducherry unit cannot be considered as shifting of a factory. (ii) That the appellant has not shifted any capital goods and only inputs were shifted - Rule 10(1) will not apply. Transfer of unutilized credit also denied on the ground that appellants have shifted on inputs and not shifted the capital goods - HELD THAT:- In the case of Ispat Industries (supra) it was held that it is not necessary that the inputs and capital goods have to be transferred. Rule 10(3) uses the expression “inputs or capital goods”. The appellant in the present case has transferred the inputs into the Puducherry unit. Thus, as per Rule 10(3), they are entitled for transfer of the unutilized credit. The disallowance of transfer of unutilized credit cannot be justified - Appeal allowed - decided in favor of appellant.
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