tranfer of 4% credit

[sv bhasker]

Dear experts

As you are aware that Rule 10A is inserted in Cenvat Credit Rule, 2004  from 1.4.2012 that enables transfer of 4% CVD to the other unit of the same assessee. Can the credit lying in balance of unit as on 31.3.2012 be transfered to other unit.

[YAGAY andSUN]

Since the Rule 10A is applicable w.e.f. 01-04-2012, therefore, credit so accumulated, can't be transferred to the other unit.  Law is silent in this regard and there is no clarification from the Department as yet.

You may approach to the Department for seeking the clarification in this regard.

[Joginder Pal]

The amended cenvat credit rule 2004, vide notification no. 18/2002-CE (N.T), provides for transfer of credit of additional duty to another unit of the same company registered with the same PAN no. , at the end of a quarter. In my opinion, there is no bar on the amount of credit to be tranferred. Hence a unit can transfer upto full credit of additional duty lying in their account as on 30-6-12. Needless to say, other conditions need to be complied with.

AI Summary

Transfer of CVD credit between affiliated units permitted in principle, but pre-effective-date balances remain legally uncertain. Rule 10A to the Cenvat Credit Rules enables transfer of CVD credit between units of the same assessee registered under the same PAN from 1 April 2012. The central issue is whether balances existing before that effective date may be transferred. Experts disagree: one contends pre-effective-date credits cannot be transferred due to the rule's silence, while another interprets the amendment as permitting transfer at the quarter end, including the full balance, subject to compliance and pending departmental clarification.