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2023 (3) TMI 495 - AT - Central Excise
Transfer of CENVAT Credit to lessee unit - Department denied to transfer the CENVAT Credit lying in the account balance of the appellant-company stating that there is no express stipulation in the agreement to transfer the liabilities of the appellant company - request for transfer of CENVAT Credit can be denied on technical grounds or not - HELD THAT:- The Department has referred to the agreement between the parties to deny the permission to transfer the CENVAT Credit, with the reason that there is no express stipulation for transfer of all liabilities of the appellant-company to the lessee unit. On perusal of the agreement, it is found that there is a clear intention between the parties to transfer the ownership of the machinery belonging to the appellant unit to the lessee unit. Such transfer is done along with transfer of raw materials, components, capital goods etc. which indicates that the lessee unit is put into the shoes of a manufacturer in the place of the appellant-company. The agreement has to be construed as to what is the intention of the parties who have entered into agreement and not by word to word analysis.
On going through the entire agreement, it is clear that there is consensus ad idem to transfer the ownership along with assets and liabilities to the lessee unit.
Thus, the rejection of the request to transfer CENVAT Credit balance as per Rule 10 of CCR 2004 is without any legal or factual basis. The Department is directed to issue permission to the appellant unit to transfer credit to the lessee unit - appeal allowed.