Tribunal Allows Appellant's Cenvat Credit Appeal, Upholds Post-Merger Transfer

The Tribunal ruled in favor of the appellant, allowing the appeal against the denial of Cenvat Credit on common input services for two manufacturing units and the refusal to transfer unutilized Cenvat Credit post-merger. The appellant was not required to reverse the Cenvat Credit amount and was entitled to transfer unutilized Cenvat Credit post-merger in accordance with the Cenvat Credit Rules 2004. The Tribunal set aside the impugned order, finding no merit in it, and granted the appeal with any necessary consequential relief.

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Issues:
Appeal against denial of Cenvat Credit on common input services for two manufacturing units and denial of transfer of unutilized Cenvat Credit post-merger.

Analysis:
The appellant, a manufacturer of motor vehicles with units in Gurgaon and Manesar, appealed against the denial of Cenvat Credit on common input services for both units and the refusal to transfer unutilized Cenvat Credit from M/s. Maruti Suzuki India Ltd. to Maruti Suzuki Udyog Ltd. post-merger. The Revenue objected to the appellant availing full Cenvat Credit on common input services for the Gurgaon unit, arguing that some services pertained to the Manesar unit. Additionally, the Revenue challenged the Cenvat Credit for the Gurgaon unit post-merger due to alleged non-transfer of capital goods. A show cause notice was issued, leading to the denial of Cenvat Credit, imposition of interest, and penalties. The appellant contested these decisions before the Tribunal.

The Tribunal considered the precedent set in the case of Doshion Ltd. Vs. CCE Ahmedabad, where it was established that there was no restriction on availing Cenvat Credit for one unit if the input services were common to multiple units before 2012. Following this, the Tribunal ruled in favor of the appellant, stating that they were not required to reverse the Cenvat Credit amount. Furthermore, the Tribunal held that the appellant was entitled to transfer unutilized Cenvat Credit post-merger in accordance with Rule 10 of the Cenvat Credit Rules 2004. Consequently, the Tribunal found no merit in the impugned order, set it aside, and allowed the appeal with any consequential relief deemed necessary.

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