Transfer of unutilised credit on factory relocation upheld where the same business moved with machinery and records.

Unutilised credit may be transferred where a factory is shifted to another location and the same business continues under the same assessee. The Tribunal treated the movement of machinery, books of account, and operations from Hyderabad to Bangalore as a genuine factory relocation, not a mere closure, and held that completion of the earlier projects did not defeat the transfer claim. It further applied prior authority that there is no legal requirement for physical stock of inputs to remain at the old premises when the unit itself is shifted. On that basis, transfer of the unutilised credit was permissible.

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Issues: Whether unutilized credit could be transferred when the factory was shifted from one place to another and the old premises ceased operations after completion of work.

Analysis: The record showed that the machinery, books of accounts, and operations were moved from Hyderabad to Bangalore for continuation of the same business under the same assessee. The Tribunal treated this movement as shifting of the factory and not a mere closure. It relied on prior decisions holding that transfer of unutilized credit is permissible where the factory is shifted and there is no legal requirement that physical stock of inputs must continue at the old premises. The fact that the projects at Hyderabad were completed did not defeat the claim, because the unit itself was relocated with the machinery and connected records.

Conclusion: Transfer of the unutilized credit was permissible and the assessee succeeded on this issue.

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