Cenvat credit transfer to successor unit does not require prior excise permission under Rule 10.

Rule 10 of the Cenvat Credit Rules allows transfer of accumulated credit to a successor unit on conversion, amalgamation, merger, sale, lease or transfer of business, and the Tribunal noted that no prior permission from Central Excise authorities is required for such transfer or availment. A successor unit may therefore take the predecessor's credit suo motu where the conditions of Rule 10 are otherwise met, and denial of credit solely on the ground of absence of prior approval is unsustainable.

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Issues: Whether credit accumulated by the predecessor unit could be taken by the successor unit under Rule 10 of the Cenvat Credit Rules without prior permission from the Central Excise authorities.

Analysis: Rule 10 permits transfer of accumulated credit to the successor unit upon conversion, amalgamation, merger, sale, lease or transfer of the business. The Tribunal held that the provision does not require any formal permission from the Central Excise authorities for such transfer or availment of credit. The denial of credit solely on the ground that the credit was taken suo motu was therefore unsustainable.

Conclusion: The objection that prior permission was necessary was rejected and the assessee succeeded on that issue.

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