Tribunal rules no duty payment on inputs in factory sale, allows transfer of Cenvat credit to buyer unit.

The Tribunal upheld the Commissioner's decision, ruling that no duty payment was required on inputs transferred in a factory sale as they remained available for manufacturing by the buyer. The Tribunal supported the transfer of Cenvat credit to the buyer unit post-sale, dismissing the Revenue's appeal based on statutory provisions and case law.

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Issues:
Revenue's appeal against setting aside duty demand on transferred inputs under Cenvat Credit Rules, 2002.

Analysis:
The appeal pertains to the transfer of a manufacturing unit along with raw materials and semi-finished goods in a slump sale to another entity. The Revenue confirmed a duty demand under Cenvat Credit Rules, 2002, alleging that the inputs transferred were not used in the final product manufacturing by the seller, thus necessitating reversal of Cenvat Credit. The Commissioner (Appeals) allowed the respondent's appeal, leading to the current appeal. The Revenue contended that Cenvat Credit is availed only if inputs are used in manufacturing the final product. They relied on precedents to support their argument, seeking to set aside the impugned order.

The respondent argued that the inputs in question were not physically removed from the factory post-sale, and the buyer continued manufacturing using these inputs, paying excise duty. They highlighted Rule 10 of Cenvat Credit Rules, 2004, allowing the transfer of credit and stock of inputs to the buyer in case of factory sale. They referenced judgments supporting their stance and distinguished the cases cited by the Revenue. The Tribunal examined both parties' contentions and the relevant legal provisions.

The Tribunal observed that the manufacturing unit sale was on an "as where is" basis, with the inputs remaining in the factory. As per Rule 10, Cenvat credit transfer to the buyer unit is permissible. The Tribunal disagreed with the Revenue's argument that Rule 10 doesn't apply to partial factory sales. Citing precedents, the Tribunal upheld the Commissioner's findings that no duty payment was required as the inputs were available to the buyer for manufacturing. The Tribunal dismissed the Revenue's appeal, affirming the Commissioner's decision based on statutory provisions and case law.

In conclusion, the Tribunal upheld the Commissioner's order, emphasizing that the sale of the factory did not necessitate duty payment on inputs, as they were available to the buyer for manufacturing. The Tribunal found no merit in the Revenue's arguments, supporting the transfer of Cenvat credit to the buyer unit post-sale. The appeal of the Revenue was dismissed, affirming the Commissioner's decision.

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