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.

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.