capital goods TFr

[vikas garg]

when we close a plant and tfr some exciseable capital goods to our new plant then what is procedure of transfer When owner is same

[YAGAY andSUN]

Central Excise: Reversal of CENVAT credit based on depreciated value.

In this matter the capital goods used for some time and thereafter removed to assessee own other factory. Revenue was of the view that the appellant should have reversed the entire credit as during the period when the goods were removed from the factory there was no provision in Rule 3 of the Cenvat Credit Rule for reversal of credit based on depreciated value. It was held that as decided in

CCE, Salem Vs. Rogini Mills Ltd. (2010 (10) TMI 424 - MADRAS HIGH COURT)  the said provision requiring reversal of the entire credit taken at the time of receipt of the capital goods in the factory cannot be applied to a situation where capital goods are cleared after use for a few years. When the transfer of the capital goods is from one factory of the same assessee to another factory of the same assessee there is no need for reversal of any credit and decided in favour of assessee. 

Sri Ranganathan Industries Pvt. Ltd. vs Commissioner of Central Excise, Coimbatore. (2013 (3) TMI 87 - CESTAT Chennai)

 

[vikas garg]

sir first we have to get premission of excise department for tfr of excise goods

 

[YAGAY andSUN]

I think that intimation would be sufficient.

[phaniraju konidena]

Rule 10A - Transfer of Cenvat Credit:

In exercise of powers conferred under Rule 5 of the CE Rules, the powers of the Commissioner vested under Rule 57AF of the CE Rules, 1944 are delegated to the Divisional Asst.Commissioner/Dy.Commissioner  - Visakhapatnam CTN No.84/2000 dtd. 22.08.2000 [2000 (121) ELT T14; CCE], Indore Notification No.2/2000 dtd.14.08.2000 [2000 (121) ELT N3]. Now the rule itself has been amended to confer the power to allow transfer of credit on the Divisional Authorities. Amended by Notification No.13/2003-CE dtd.01.03.2003.

In the under noticed case, the appellant shifted the factory without permission. The credit on transferred input was denied for this reason. The Tribunal also upheld this order. It is submitted that this rule does not prescribe prior permission. Therefore, if all the other condition prescribe under Rule 10 of  CCR, 2004, had been satisfied, permission ought to have been granted post facto - Chlochem Ltd., Vs. CCE  (2003 (10) TMI 452 - CESTAT, MUMBAI) = [2004 (164) ELT 336 (Trib.- Mum).

In an another case, the appellant shifted its Hyderabad Unit to Bangalore complete with stocks, capital goods, books of accounts and took cenvat credit at Bangalore factory. Both units had been under the same management. The Tribunal rejected the Revenue's contention that this was a case of closure of factory and not entitled to transfer credit. This was a case where entire factory had been shifted with bag and baggage. Transfer of credit could not be refused. ECIE Impact Pvt. Ltd., Vs. CCE (2006 (2) TMI 323 - CESTAT, BANGALORE) =[2006 (198) ELT 390 (T - Bang.)]

AI Summary

Transfer of Cenvat credit: intra-company factory transfers need not trigger full reversal if Rule 10 conditions are met. Where capital goods already used in production are moved from one factory of the same assessee to another, reversal of the entire Cenvat credit taken at receipt is not required; transfers between factories under the same ownership can be accepted without reversal. Rule 10 governs transfer of Cenvat credit and does not mandate prior permission, so post facto permission or intimation may suffice if Rule 10 conditions are satisfied, though administrative practice has varied and factual completeness of the shift affects entitlement.