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TMI Blog2023 (6) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... s accepted by the department. Subsequently, merger took place with effect from 27.3.2008. The appellant had transferred the CENVAT credit which was lying in Plant - I, which was earlier an EOU unit to their merged DTA unit. The department was of the view that as per sub-rule (3) of Rule 10 of CENVAT Credit Rules, 2004, only if the ownership of capital goods / inputs are transferred to the other unit, the assessee would be eligible to have the credit transferred. The credit so transferred to the appellant-unit appeared to be not legal and proper. Show Cause Notice was issued proposing to recover the transferred credit along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand along with interest and imposed penalty. Aggrieved by such order, the appellant is now before the Tribunal. 2. The learned counsel Shri S. Muthuvenkataraman appeared and argued on behalf of the appellant. It is submitted that the appellant had two units adjacent to each other. One of the units was clearing goods into DTA and the other unit was earlier functioning as an 100% EOU. Both the units were having CENVAT credit in their accounts separately. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e findings in the impugned order. 7. Heard both sides. 8. For better appreciation, Rule 10 of CENVAT Credit Rules, 2004 is reproduced as under:- 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. (2) If a provider of output service shifts or transfers his business on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of the business to a joint venture with the specific provision for transfer of liabilities of such business, then, the provider of output service shall be allowed to transfer the CENVAT credit lying unutilized in his accounts to such transferred, sold, merged, leased or amalgamated business. (3) The transfer of the CENVAT credit under sub-rules (1) and (2) sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, recovery of duty, along with interest as applicable, and imposition of penalties, appellant seeks relief. The findings of the adjudicating authority are that, consequent upon debonding of the two erstwhile units under the scheme in the Foreign Trade Policy, the new units registered under Central Excise Act, 1944 would be deemed to have commenced existence afresh and, that sans entitlement to the transfer provisions, in Rule 10 of Cenvat Credit Rules, 2004, or transitional provisions, in Rule 11 of Cenvat Credit Rules, 2004, as well as lack of any specific provision for retention by such debonded units, the accumulated credit lapses on date of debonding. On scrutiny of the records, it appears that the capital goods, both indigenous and imported, as well as finished goods had been assessed to appropriate duties on debonding and it also appears that these duties had not been subsumed in the accumulated credit. ***** ****** ******** ****** 6. Whether holding the title to those privileges or not, all manufacturers, other than those operating outside the 'customs territory', are registered under the Central Excise Act, 1944 and subject to the same excisability under Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e refund route, utilization is open-ended. This provision obviates the need for explicit provision that the adjudicating authority seeks. 9. The existence of the appellant as an assessee has not been erased, substituted or subsumed at any point in time. The continued existence of the manufacturing facility is not compromised by a hiccup that is rooted in administrative orderliness. The provenance of the accumulated credit is not questioned. The statutory entitlement to regular monetization of the accumulated credit cannot be alienated; the alternative of utilization is not restricted by any condition. Denial of such utilization would have the impact of taxing the exporter as ultimate consumer and burdening the appellant with an implied duty on exports that is not authorized by law. To do so is an act illegality. Accordingly, we hold that denial of carry forward of accumulated Cenvat credit to assessees debonding from the '100% Exported Oriented Unit' scheme to continue operations without the privileges is not correct in law and is set aside. Appeals are allowed." 10. So also in the case of Sun Pharmaceuticals (supra), the Tribunal held as under:- "8. We find that at the materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er obtains credit for the excise duty paid on raw material to be used by him in the production of an excisable product immediately it makes the requisite declaration and obtains an acknowledgement thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. There is no provision in the Rules which provides for a reversal of credit by the excise authorities except where it has been illegally or irregularly taken, in which event it stands cancelled or, if utilised, has to be paid for. Here, the credit has been validly taken and its benefit is available to the manufacturer without any limitation in time or otherwise unless the manufacturer itself chooses not to use the raw material in its excisable product. 9. In the absence of provisions requiring the DTA unit to reverse the credit balance at the time of its conversion into an EOU, the above observations of the Tribunal apply. Therefore, the impugned demand and penalties are not sustainable. In the result, the impugned order is set aside and this appeal allowed." 11. In the case of Jubilant Life Sciences Ltd. (supra), it is held as under:- "3. At the outset, the le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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