Delay - Rule 10 Application Transfer of Cenvat

[Sandeep Soni]

Dear Expert,

Request to give your advice on below:

The proprietory firm business sale to New Company. All formatlities of old RC surrender & New RC Reg completed on 17.06.2013.Closing Cenvat of March 13 taken as opening ER-3 April to June with new company. This we have done without applying under Rule 10 for transfer of cenvat.

Till date we have not applied under Rule 10. Now Excise Superitendent has sent us letter as Scrutiny of ER-3 saying you have not taken permission under Rule 10 and CENVAT taken & utilised is liable for reversal.

Kindly advice how should I proceeds in this matter.

AI Summary

Transfer of CENVAT credit requires accounting for inputs and capital goods to satisfy the tax authority before credit is accepted.
Unutilized CENVAT credit may be transferred on sale or change of ownership only where inputs or capital goods are transferred and are accounted for to the satisfaction of the Deputy Commissioner or Assistant Commissioner; the rule requires verification and accounting rather than an express prior permission, and failure to satisfy the officer exposes claimed credit to reversal.