https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=762232 https://www.taxtmi.com/caselaws?id=762232 Conversion of 100% EOU into DTA - denial of CENVAT Credit - non-registration of debonded EOU - denial of credit u/r 10 of CENVAT Credit Rules, 2004 - denial of transfer of PLA balance of debonded EOU to CENVAT credit of DTA. Denial of CENVAT credit of Rs. 10,77,05,805/- on allegation of non-registration of debonded EOU - HELD THAT:- The appellant provided all possible disclosures in their application. Pursuant to this letter, the department issued amended central excise registration certificate on 11-03-2013. In this background, when the appellant made all disclosures in their application and amended central excise registration was issued, we do not find any merit in confirming the demand on allegation of non-registration - there are force in appellant s arguments that the department is taking contrary stand as at one hand it is denying credit on the ground that DTA excise registration does not bear address of debonded EOU but at the same time has accepted payment of central excise duty on the clearance made from the premises of EOU. When the appellant provided re-defined boundaries for amended registration in their application and basis the said application revised excise registration was issued, merely non mentioning of the specific plot number cannot lead to denial of credit - there are force in appellant s arguments that it is a settled law that registration of premises is not a pre-requisite for availing credit. It was held in the case of MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX [ 2011 (9) TMI 450 - KARNATAKA HIGH COURT ] that In the absence of a statutory provision which prescribes that registration is mandatory and that if such a registration is not made the assessee is not entitled to the benefit of refund, the three authorities committed a serious error in rejecting the claim for refund on the ground which is not existence in law. Also, the appellant s submission that substantial benefit of credit cannot be denied for procedural lapse is a settled preposition of law as has been held by various decisions including the Bombay High Court decision in COMMISSIONER OF CENTRAL EXCISE, NAGPUR, VERSUS M/S. LARSEN TOUBRO LTD., THE CUSTOM EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, MUMBAI [ 2022 (1) TMI 665 - BOMBAY HIGH COURT ] - thus, the demand do not sustain. Denial of credit of Rs. 4,21,16,159/-, under Rule 10 of CENVAT Credit Rules, 2004 - HELD THAT:- On a bare perusal of provision of Rule 10 of CCR it can be seen that the said provision can be invoked in specific circumstances like shifting of manufacturing unit at another site of transfer of factory due to change of ownership, sale, merger, amalgamation, lease or transfer of the factory to a joint venture. Herein, the appellant has merged adjacent debonded EOU into their DTA unit for which clearly provision of Rule 10 of CCR cannot be invoked and therefore, no demand can sustain under Rule 10 of CCR. The appellant converted its EOU unit into DTA and during the said conversion transferred the balance CENVAT credit of EOU into DTA. There are force in appellant s arguments that during conversion of unit from DTA to EOU or from EOU to DTA there is no bar on transfer of CENVAT credit. The issue at hand pertains to conversion of EOU to DTA, it is observed that there is no provisions under the law which bars debonded EOU unit to avail credit in its DTA unit post conversion - the demand of Rs. 4,21,16,159/-, cannot sustain. Denial of transfer of PLA balance of Rs. 7,89,895/- of debonded EOU to CENVAT credit of DTA - HELD THAT:- The PLA is nothing, but appellant s own money lying in balance which can be utilized at a future event for payment of excise duty. Herein, transiting of credit into DTA unit, on merger of EOU into the said DTA, also serves the same purpose. Also, since the Leaned Commissioner admits that the appellant is entitled for refund of the same, transiting the credit in DTA unit has no revenue impact. As has been held in JAY SHREE TEA INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., KOLKATA [ 2005 (8) TMI 189 - CESTAT, KOLKATA ] pending utilization of the PLA amount towards excise duty, the department has no claim over such amount. As such, demand on this issue is not sustainable. Thus, no demand can sustain. Accordingly, the impugned order is set aside and the appeal allowed with consequential reliefs, if any. Case-Laws Central Excise Tue, 26 Nov 2024 00:00:00 +0530