TMI Blog2016 (5) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... iness is legally bound to transfer the credit which cannot remain in existence. Appellant continues to provide output service on which they were paying service tax and towers and other infrastructure having remained where the same were located earlier and continue to be used by the appellant. In such a scenario, we prima facie agree with the learned advocate that the denial of credit to the appellant is not in accordance with the provisions of Rule 10. As such, on the point of time bar also, the appellant has good prima facie case. Therefore the condition of pre-deposit is dispensed with and all. - Stay petition allowed - Service Tax Stay Application No. 52965 of 2014 & Service Tax Appeal No. 52490 of 2014 - Stay Order No . 50459 /20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving unutilized credit in their account books. After making certain investigations, the appellant was served with a show cause notice on 20.4.2010 seeking to recover the Cenvat credit availed by them on capital goods and inputs used in the erection of towers and fabricated building and utilized by them for payment of Service tax on the output services during the period 10.9.04 till 31.1.08. Revenue also sought to recover the credit lying unutilized with them as on 31.1.08, in terms of provisions of Rule 3(5) read with Rule 10(2) of Cenvat Credit Rules. 4. During the adjudication, the Commissioner held that Rule 3(5) of Credit Rules, is not applicable in the present case since no physical removal took place during the transfer of business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Rule stand dropped by the adjudicating authority on the ground of inapplicability of the same, and the demand stand confirmed in terms of provisions of Rule 10 of Cenvat Credit Rules which reads as follows:- 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, amalgamation, lease or transfer of the factory to a joint venture with the specific provision for transfer of liabilities of such factory, then, the manufacturer shall be allowed to transfer the CENVAT credit lying unutilized in his accounts to such transferred, sold, merged, leased or amalgamated factory. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pportive of the fact that said rule is beneficial piece of legislation extending the facility to the transferor to seek transfer of accumulated credit in the circumstances and situations therein. The question as to when the transferor does not seek the transfer of the accumulated credit, whether the same would lie in the account books of transferor or in that case, the credit is required to be disallowed. The plain reading of the said Rule nowhere suggest that owner or the transferor of the business is legally bound to transfer the credit which cannot remain in existence. 7. There is no direction in the said rule suggesting that in case of non transfer of credit, the manufacturer himself would not be in a position to use the same. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merits of the case, it is submitted that the entire transaction was in the light of the Delhi High Court s order and with the knowledge of the department the demand is prima facie barred by bar of limitation. The adjudicating authority has himself not imposed any penalty on the assessee by observing that matter involve interpretation of Rule 10 of Cenvat Credit Rules, 2004 and it cannot be alleged that transferor has the intention to evade payment of service tax by utilizing the unutilized credit. He further observed that the assessee was under bonafide belief that in terms of High Court s order they are not refrained from utilizing the credit under Rule 10(2) of the Cenvat Credit Rules. We find that circumstances for imposition of penal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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