TaxTMI 
TaxTMI 
2009 (10) TMI 807
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....it II is concerned, the demand of Rs. 5,10,55,342/- arose for wrongfully transferring CENVAT credit by that unit in contravention of the provisions of law relating to CENVAT credit, So also penal consequence of law followed in this case. 3. Both the appeals were filed on 16th February, 2009 along with stay applications. Such applications were listed for hearing on 7th May, 2009. But for no fruitful hearing could proceed for difficulties of litigants, On 23rd June, 2009 an order was passed by Tribunal granting interim stay and directing the revenue that no coercive measures should be taken to recover the dues till the stay applications are decided. Accordingly, the matter again came on the Board on 20th August, 2009. But on that day also, stay applications remained undisposed for cause of one side. Therefore, the matter again came for hearing on 6th October, 2009. But on that date, there was an application from the learned counsel for the appellant praying for adjournment on his medical ground. 4. The adjudication against which stay applications were filed having been completed on 12-11-2008 resulting in huge demand, keeping the matter pending further was considered to be impr....
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....zed by the appellant company in respect of discharge of duty liability for the goods cleared by it's Unit-I. Revenue also was of the view that in absence of Cenvat credit in the records of Unit-1, clearance of the goods made by that unit during the period from April 2007 to January 2008 was clearance of goods without payment of excise duty. Such observation resulted in adjudication with the aforesaid consequences of demand, penalty and interest against both the units. 8. On the aforesaid factual back-ground, the issue before the learned Commissioner was whether, transfer of credit from one factory to another factory without transferring the capital goods or liabilities is proper and legal or not. Also whether Cenvat credit so transferred from Unit-II to Unit-I can be utilized for payment of duty on excisable goods manufactured and cleared from Unit-1 or not. 9. Learned Commissioner examined the averments of the appellant in para-58 of the Order appearing in Appeal record of Appeal No. E/138/09. It is apparent that as against the demand made earlier against Unit-2, in terms of O-I-O No. 3/2002-Commr dated 28-2-2002/15-3-2002 that was partly discharged from PLA and partly from ....
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.... the benefit of Rule 10 of Cenvat Credit Rules, 2004. When there is contravention of Rule 3(4) and Rule 10 of Cenvat Credit Rules 2004, the appellants should suffer even penal consequences of law. To support her arguments, she relied on the followings decisions : (1) M/s. Rollatainers Ltd., 2004 (170) E.L.T. 257 (S.C.) to argue that as two factories within same premises, same owner and common balance sheet with common boundaries but having separate staff, separate management, separate passage, separate entrance with separate Central Excise Registration and producing different end products, such factories not treatable as one and the same factory, hence are two factories separately eligible to exemption - Sections 2(e) and 6 of Central Excise Act, 1944. (2) M/s. Neer Shree Cement, 2003 (161) E.L.T. 418 (T. - Del.) to argue that, as Modvat on capital goods - Diesel locomotive engines used not in appellant's factory but in another factory of owners of appellant's unit - Premises of another factory not to be treated as precincts of appellant's factory - Modvat credit not admissible - Rule 57Q of erstwhile Central Excise Rules, 1944 - Section 2(e) of Central Excise Act, 1944. (....
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....dit of Unit-II against the tax liability of Unit-I. But the appellants took credit from April 2007 itself for its Unit-I. It appears clearly that! writing letter dated 24-3-2007 as appearing in para-3 of the adjudication order at page 3 of the appeal case No. 138/09, the appellant proceeded to avail credit even before a letter dated 6/09 July 2007 was issued to the appellant. There is a clear finding in adjudication that the appellant has enjoyed credit by it's unit-I for the period from April 2007 to January 2008 without such credit being legally earned by that Unit. There is no controversy that Cenvat credit of Rs 5,77,91,275/- was earned by unit-II. It is apparent from para 2 of the order of adjudication at page 3 in appeal case No E/139/09 that against credit of Unit-II, the Unit-I suo motu utilized, credit to the tune of Rs. 5,10,55,342/- without earning any credit to that extent by Unit-I. Revenue's grievance is that Cenvat credit is not transferable when there are two different excisable entities with distinct registration numbers under the law as aforesaid. Rule 10 of the Cenvat credit rules, 2004 permitting transfer in certain events, reads as under : "RULE 10. Transfer....