TMI Blog2017 (8) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of the erstwhile factory and subsequently to the Guntur CE authorities. As seen above, Vasai CE authorities have even confirmed the availability of ₹ 1,44,10,817/- lying as balance in the cenvat credit account of the erstwhile factory. This being so, and without any allegation that stock of inputs, goods in process / finished products or capital goods have not been transferred from Vasai to Guntur factory, but otherwise diverted or sold clandestinely, it would be puerile to cast any allegation on the assessee that they are not entitled to enter the same account of credit in their registers / books of account of their Guntur factory. The assessee has substantially complied with the procedural requirements of Rule 10 of CCR 2004 and substantive benefit extended vide that rule, namely, facilitating transfer of cenvat credit/PLA from their erstwhile Vasai factory to their new Guntur factory, cannot be then denied - appeal allowed - decided in favor of assessee. - E/30391/2016, E/COD/30443/2016 & E/Stay/30444/2016 & E/30394/2016 - A/31238-31239/2017 - Dated:- 20-7-2017 - Mr. M.V. Ravindran, Member (Judicial) And Mr. Madhu Mohan Damodhar, Member (Technical) Shri Pare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent-assessee as a manufacturer is in order. Aggrieved by the order of Ld. Commissioner (Appeals), the department has filed Appeal No.E/30394/2016. 5. After the issue of the above impugned order dt. 29.10.2014 (relating to appeal No.E/30394/2016), another SCN was issued by the department to the assessee on 11.11.2014, proposing recovery of the disputed cenvat credit of ₹ 1,44,10,817/- and ₹ 34,572/- (PLA) along with interest thereon, and imposition of penalties under various provisions of law. On adjudication, original authority vide impugned order dt. 28.03.2016, confirmed the demands proposed and also imposed a penalty of ₹ 10 lakhs on the assessee under Rule 15 (1) of the CCR 2004. Aggrieved assessee has filed Appeal E/30391/2016. 6. On behalf of the department, Ld. A.R Shri P.S. Reddy reiterated the grounds of appeal and also made oral submissions which can be broadly summarized as follows : (i) Assessee s unit has not been transferred by following the procedures prescribed under Rule 10 of the Cenvat Credit Rules, 2004 but they have availed credit in question suomotu. (ii) As per Rule 10 of CCR, transfer of credit can be allowed only i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also. (d) An intimation was sent on 30.07.2013 to the AC Guntur that shifting process was completed, and finished goods as well as machinery were received at Guntur unit, and that all records and books of accounts maintained at Vasai had also been transferred. Copies of all invoices and transport documents for such transfer were also submitted. (e) The Superintendent, Range-III Vasai was informed by the appellant on 23.10.2013 that the entire factory was shifted to Guntur and copies of all letters submitted before all Central Excise authorities till then and extracts of Cenvat registers were also submitted. (f) A letter was submitted on 18.11.2013 to AC, Guntur that there was no response to any of the letters submitted and hence substantial compliance of Rule 10 (3) of the Cenvat Credit Rules was concluded. It was specifically stated that a credit entry of ₹ 1,44,10,817/- in Cenvat register and that of ₹ 34,572/- in PLA were raised, and copies of cenvat register and PLA were also submitted. (g) The appellant vide their letter dt. 10.12.2013 informed the AC, Vasai about the entire sequence of events and all letters from 17.9.2012 to 10.12.2013 were s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in E/30394/2016 may be dismissed. 8. Heard both sides and have gone through the facts of the case. 8.1 The core issue in dispute that comes up for resolution in these appeals relates to the eligibility or otherwise of the assessee to avail cenvat credit of ₹ 1,44,10,817/- relating to their Vasai unit which was again taken in their books of accounts after transfer of their unit to Guntur. The fate of both these appeals are therefore intrinsically tied to the decision on this issue. 8.2 From the facts on record, assessee has undisputedly shifted their factory from Vasai to Guntur. The legal provisions for transfer of cenvat credit in such a case are governed by Rule 10 of CCR 2004, which are worthy of reproduction : 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 acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived at Guntur unit and that all records and books of accounts maintained at Vasai had been transferred. Apparently, there was no response from the CE authorities against this communication. 8.6 Almost four months later, on 18.11.2013, the assessee has further communicated having taken credit entry of ₹ 1,44,10,817/- in the cenvat register and ₹ 34,572/- in PLA. This was followed by subsequent communications to the jurisdictional authorities in Guntur on 10.12.2013, 19.12.2013 and 20.01.2014. We find that the factum of at least some of these correspondences have been conceded by the department in the SCN dt. 11.11.2014 issued for proposed demand of allegedly irregularly availed cenvat credit of ₹ 1,44,10,817/-and PLA amount of ₹ 34,572/- (relating to Appeal E/30391/2016). 8.7 Interestingly, the very same SCN dt. 11.11.2014 narrates the intra departmental correspondence between the Guntur and Vasai CE authorities. Also, from the said narration, in paras 4 to 6 of the SCN dt. 11.11.2014 (page 201 of the appeal book in E/30391/2016), it clearly emerges that the Deputy Commissioner of Central Excise, Vasai Division in a letter dt. 20.12.2013 had informed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming about the proposed shifting of their unit from Vasai to Guntur had informed that : i) They have obtained a new Central Excise registration ECC No.AAHFB7252LEM002, at Guntur. ii) They will be shifting finished goods lying in their Vasai unit under Rule 10 of the Credit Rules, without discharging the duty. iii) They shall account for the Finished goods lying in Vasai Unit and transferred to Guntur unit in their Daily Stock Register at Guntur. Thereafter, they shall request Central Excise Authorities at Guntur to verify physical receipt of the material, if they so desire and send a copy of such verification report to Vasai Divisional Office. If no verification is conducted at Guntur by the Central Excise Authorities, they shall send a self attested Xerox copy of their Daily Stock Register. iv) In their letter they had not submitted the details of stock lying in Vasai unit nor the amount of credit balance which they intended to transfer nor the worksheet of the CENVAT Credit attributable to the Stock of Finished goods intended to be transferred from Vasai unit to Guntur. v) No permission is required from the Vasai Division office for shifting/transferring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for refund of unutilized cenvat credit on account of export including disputed amount of ₹ 1,44,10,817/- for the quarter ending December 2013, did the department find fault with the manner of taking the said cenvat credit and its liability. The main reason for rejection of the claim is that transfer of the credit amount of ₹ 1,44,10,817/- from old unit to their new unit has been done without complying with provisions of Rule 10 of CCR 2004. This proposition has been confirmed by the original authority and upheld in the impugned order-in-appealdt.29.10.2014 (pertaining to Appeal No.E/30394/2016). 9.2 We find such a conclusion to be flawed. Rule 10 of the Rules facilitates transfer of cenvat credit available on record in situations when a factory is shifted or transferred on account of change in ownership, sale, merger etc. The procedural requirements tied to such transfer are very simple indeed. Obviously, the intention of the legislature is to ensure that when such a situation arises, as they often do in the course of trade and commerce, the transition, at least from the CE point of view, should be as simple and seamless as possible and not weighted down with onerous ..... 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