9911796707
TMI Blog2012 (12) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... bsequently, the appellant established second manufacturing unit at Dabwali Road, Sirsa, Haryana which was also registered with the Excise Department. 3. In the year 2005, the appellant decided to stop production at his second unit located at Dabwali Road, Sirsa. Thus he wrote a letter dated 11.5.2005 to the Assistant Commissioner, Central Excise, Hisar informing him about his intention to close the second unit and to merge the same with the first unit located at Meerut. The appellant also intimated that he intended to transfer the capital goods and also that stock of inputs was nil at the relevant time and requested for permission to transfer his unutilized cenvat credit of Rs.41,20,514/- to his Meerut unit in terms of Rule 10(1) of Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice raising demand of Rs.41.20.514/- and imposition of penalty was also proposed in the notice. The appellant contested the show cause notice claiming that he has rightly transferred the unutilized cenvat credit to his account at Meerut in terms of Rule 10(1) of Cenvat Credit Rules, 2004. Additional Commissioner, Central Excise, after hearing the parties vide his order dated 7.5.2010 disallowed the transfer of cenvat credit to the first unit and confirmed the duty demand of Rs.41,20,514/- with interest and also imposed penalty of equal amount. 6. The appeal preferred against the aforesaid order in original did not find favour with the Commissioner (Appeals), who vide impugned order in appeal No.205/CE/MRT I/2010-11 dated 31.8.2010 dism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Counsel for the appellant has strongly urged us to accept the appeal and set aside the impugned order. 9. Shri Nagesh Pathak, ld. AR for the department on the contrary has argued in support of impugned order and reiterated the reasoning adopted by the Commissioner (Appeals). 10. We have considered the rival contentions and perused the material on record. 11. The entire controversy in this appeal revolves round the interpretation of Rule 10(1) and (3) of Cenvat Credit Rules, 2004 which are reproduced thus: RULE 10. Transfer of CENVAT credit. - (1) If a manufacturer of the final products shifts his factory to another site or the factory is transferred on account of change in ownership or on account of sale, merger, am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Hisar and found that there were no "Inputs" in stock/in process and that the Assistant Commissioner in response to the communication sent by the Commissionerate Meerut intimated them vide letter dated 26.10.2005 addressed to Assistant Commissioner, Central Excise, Meerut (UP) that duty paying documents involving central excise duty of Rs.41,20,514/- have been got verified and the same were found in order. Along with this intimation, photocopy of RG-23A Part I showing nil stock of raw material and finished goods as also copy of the ER-1 return for the month of May 2005 indicating unutilized cenvat credit of Rs.41,20,514/- as also copies of Form - 31 challan, challan outward form, ST -38 of Haryana Government, challan of U.P. check post, Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The intention of the Government is to provide the benefit only when the manufacturer shifts his factory to another site, lock, stock and barrel. Further, on a perusal of Rule 10(3) of the Cenvat Credit Rules, 2004, it is evident that the transfer of the Cenvat Credit under sub-rules (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 to the new site and the inputs, or capital goods, on which credit has been availed of are duly accounted for to the satisfaction of the Deputy Commissioner of Central Excise or, as the case may be, the Assistant Commissioner of Central Excise. Thus, it is necessary in to order t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her site and also fulfills the requirement of Rule 10(3) of Cenvat Credit Rules, 2004. The Commissioner (Appeals) has interpreted the word 'another site' as a new site where there was no production unit in existence. This approach of the Commissioner (Appeals), to our mind, is incorrect. The word 'another site' used in Rule 10(1) of Cenvat Credit Rules means the site other than the factory which is being shifted. The second ground for disallowing transfer of unutilized cenvat credit in the impugned order is that at the time of shifting there were no 'Inputs' as such or in process in the factory of the appellant at Sirsa. As such under Rule 10(3) of Cenvat Credit Rules, the transfer of cenvat credit was not allowable. This approach of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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