EXCISE Appeal No. 10076 of 2020-SM
[Arising out of Order-in-Original/Appeal No AHM-EXCUS-002-APP-92-2019-20 dated
24.10.2019 passed by Commissioner ( Appeals ) Commissioner of Central Excise, Customs
and Service Tax-AHMEDABAD-II]
Transformers & Rectifiers India Limited
VERSUS
Commissioner of Central Excise & ST, Ahmedabad
APPEARANCE :
Shri M.G. Yagnik, Advocate for the Appellant
Shri Rajesh K Agarwal, Superintendent (AR) for the Revenue.
CORAM:
HON’BLE MR. RAMESH NAIR, MEMBER (JUDICIAL)
DATE OF HEARING : 02.02.2023
DATE OF DECISION: 06.02.2023
FINAL ORDER NO. A/10207 / 2023
RAMESH NAIR :
In the present case the appellant was denied Cenvat credit by the
Revenue on the ground that Cenvat credit of other unit i.e. Moriya unit was
transferred to appellant’s unit before the due date and utilized the same for
payment of duty in terms of Rule 10A of Cenvat Credit Rules, 2004.
Shri M.G. Yagnik, learned Counsel appearing on behalf of the appellant
submits that even though there is procedural lapse of transferring credit
before due date but for the period between the credit was due and credit
was taken, the appellant have paid interest. Therefore, the Cenvat credit on
the appellant’s end should not have been denied. He submits that the issue
raised only on the basis of audit conducted at the transferor unit i.e. Moriya
and on the observation of audit, appellant had paid interest and the issue
was closed, therefore at the appellant’s end the Cenvat credit cannot be
denied. He further submits that if at all there is lapse, it is only on the part
of Moriya Unit who is transferor, for that reason appellant cannot be made
sufferer for the substantial benefit of Cenvat credit.
Shri Rajesh K Agarwal, learned Superintendent (AR) appearing for the
Revenue reiterates the findings of the impugned order.
I have carefully considered the submissions made by both the sides
and perused the record. I find that the lower authorities have denied Cenvat
credit on the challans issued for transfer of credit from their other unit at
Moriya to the unit of the appellant at Changodar. The reason for denial was
that credit was transferred two months before the period prescribed under
Rule 10A of Cenvat Credit Rules, which is reproduced below:-
RULE [10A. Transfer of CENVAT credit of additional duty leviable under sub-section (5)
of section 3 of the Customs Tariff Act. — (1) A manufacturer or producer of final
products, having more than one registered premises, for each of which registration
under the Central Excise Rules, 2002 has been obtained on the basis of a common
Permanent Account Number under the Income-tax Act, 1961 (43 of 1961), may transfer
unutilised CENVAT credit of additional duty leviable under sub-section (5) of section 3 of
the Customs Tariff Act, lying in balance with one of his registered premises at the end of
a quarter, to his other registered premises by—
(i)
making an entry for such transfer in the documents maintained under rule 9;
(ii)
issuing a transfer challan containing registration number, name and address of
the registered premises transferring the credit and receiving such credit, the amount of
credit transferred and the particulars of such entry as mentioned in clause (i),
and such recipient premises may take CENVAT credit on the basis of the transfer challan.
From the above Rule, the transferor assessee is required to transfer the
credit at the end of the quarter. In the present case, for the quarter ending
December 2013, instead of transferring credit on 31.12.2013, it was
transferred on 31.10.2013. Similarly for the quarter ending September
2014, instead of transfer of credit on 30.09.2014 it was transferred on
31.07.2014. I find that there is no dispute that the credit which was
transferred was lying accumulated in the Cenvat account of transferor unit.
The transfer of credit from one unit to another unit of the same assessee
company in terms of Rule 10A is only a procedural requirement and it is not
a case of any fresh payment of duty. The credit which is transferred is in
respect of duty which was already paid. Therefore, by transfer of credit
there is no Revenue implication. Moreover, for the early transfer of credit
and availment thereof, the appellant has admittedly paid the interest due to
which the availment of credit shall be treated as on last date of the quarter
in both the cases. Therefore, only for early transfer, credit cannot be
denied.
Without prejudice to the above findings, I further find that if at all
there is lapse, it is on the part of the transferor unit against which the audit
had already raised the issue and on payment of interest the issue was
settled and no further action was taken against the transferor unit. For this
reason also Cenvat credit should not have been denied to the appellant.
As per my above discussion and findings, I do not find any reason that
in the facts and circumstances of the present case why the credit can be
denied. Accordingly, the impugned order is set-aside and appeal is allowed
with consequential relief.
(Pronounced in the open court on 06.02.2023)
(Ramesh Nair)
Member (Judicial)
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