Court denies Cenvat credit transfer due to factory relocation; ruling under Rule 10 upheld

The High Court upheld the Customs, Excise & Service Tax Appellate Tribunal's decision denying Cenvat credit upon the relocation of a factory due to the new location not operating under the Cenvat Scheme. The appellant's argument under Rule 10 was rejected as the new factory did not fall under the scheme, making the credit transfer inapplicable. The Tribunal's ruling that no transfer of credit was possible to a non-Cenvat Scheme factory was upheld, leading to the dismissal of the appeal for lack of merit.

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Issues: Challenge to order of Customs, Excise & Service Tax Appellate Tribunal regarding Cenvat credit on shifting of factory from one location to another.

The High Court judgment pertains to an appeal challenging an order by the Customs, Excise & Service Tax Appellate Tribunal regarding the entitlement to Cenvat credit upon shifting a factory location. The appellant had relocated their factory from Faridabad to Roorkee-Haridwar, leading to a demand for payment under Rule 3(5) of the Cenvat Credit Rules, 2004. The appellant contended that Rule 10 entitled them to the credit due to the relocation. However, it was established that the factory at the new location was not operating under the Cenvat Scheme, rendering Rule 10 inapplicable. The Tribunal's decision, which stated that no transfer of credit was feasible as the new factory was not under the Cenvat Scheme, was deemed justified. The judgment emphasized that Rule 10 does not allow for the transfer of capital goods to a factory where the Cenvat Scheme is not in place, thereby upholding the Tribunal's ruling. Consequently, the appeal was found to lack merit and was dismissed.

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