2022 (11) TMI 857 - AT - Central Excise

Tribunal rules in favor of appellant on Cenvat credit issues.

The Tribunal ruled in favor of the appellant on both issues related to Cenvat credit utilization and transfer. The Tribunal found that the demand for ... Utilization of carried forward CENVAT Credit - case of the department is that the credit which was carried forward should be lapsed and the same could not have been utilized for the payment of duty - transfer of unutilized credit from one unit to another - HELD THAT:- Reliance placed in the case of M/S MOHIT INDUSTRIES LTD VERSUS COMMISSIONERS OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX-SURAT-II (APPEAL) [2015 (10) TMI 1652 - CESTAT AHMEDABAD] where it was held that The appellant in the grounds of appeal stated before the Commissioner (Appeals) they have maintained records separately against the exempted as well as dutiable finished goods. This fact was not seriously disputed by the Commissioner (Appeals). Thus, it has been settled that the appellant is entitled to utilize the credit which was carried forward as on 09.07.2004 and it was also settled that the transfer of credit from the silvassa unit to surat unit is correct and legal - since both the issue have been settled in favour of the appellant, the demand in the present impugned orders shall not sustain. Appeal allowed. Issues:1. Utilization of Cenvat credit carried forward as on 09.07.20042. Transfer of unutilized credit from Silvasa unit to Surat unitIssue 1: Utilization of Cenvat credit carried forward as on 09.07.2004The appellant had carried forward accumulated or utilized Cenvat credit as on 09.07.2004 and utilized it for payment of duty on goods cleared under Notification No. 29/2004-CE. The department contended that the carried forward credit should have lapsed and could not have been utilized for duty payment. The Adjudicating Authority and Commissioner (Appeals) upheld the demand for the utilized Cenvat credit. However, the appellant argued that previous Tribunal decisions in their own case had settled the issues raised in the show cause notices. The Tribunal in its final orders dated 04.02.2015 and 10.05.2019 found that the demand for Cenvat credit utilization was not justified as the facts regarding maintenance of separate records were not clearly mentioned, and the credit transfer from Silvasa to Surat was legal. The Tribunal set aside the demand, allowing the appeals based on previous decisions.Issue 2: Transfer of unutilized credit from Silvasa unit to Surat unitThe appellant transferred unutilized Cenvat credit from their Silvasa unit to their Surat unit. The department alleged non-compliance with credit transfer provisions. The Tribunal, in its final order dated 12.07.2018, analyzed Rule 10 of CCR, 2004, which allows the transfer of credit to a transferred unit. The Tribunal found that the Rule does not prescribe a specific procedure for credit transfer, only requiring the transfer of stock to the transferee unit. The Adjudicating Authority's imposition of conditions on the appellant for prior permission was deemed unwarranted. The Tribunal noted that the appellant had informed the authorities about the transfer and emphasized that the denial of credit transfer was unsupported by law. The Tribunal allowed the appeal by remanding the matter to the Adjudicating Authority for verification of records and a reasoned order. The Tribunal concluded that the transfer of credit from Silvasa to Surat was legal and correct based on the settled issue in the appellant's favor.In conclusion, the Tribunal set aside the impugned orders and allowed the appeals, ruling in favor of the appellant on both issues of Cenvat credit utilization and transfer. The judgments in the appellant's own case established the legality of the actions taken by the appellant regarding the carried forward credit and transfer of credit between units.