2013 (7) TMI 308
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....vat credit amounting to Rs.2,01,49,097/- and equal amount of penalty on the appellant unit at Dolvi and appellant unit at Kamothe in each case. 3. The briefly stated facts of the case are that the appellant having unit at Dolvi are engaged in the manufacture of excisable goods viz H.R.Coils & sponge iron falling under Chapter 72 of C.E.T.A. 1985. The appellants have one of their unit located at Kamothe which was engaged in the activity of cutting/slitting of H.R.coils into sheets/plates/strips. The CBEC vide circular No.811/08/2005-CX dated 02.03.05 withdrew its earlier circular dated 7.9.01 wherein it was clarified that the process of cutting or slitting of H.R.coils into sheets/plates/strips would amount to manufacture. Consequently, Kam....
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....dit which was transferred to it from Taloja. 4.1 As far as the findings of the ld. Commissioner in para 16 of the order that the Kamothe unit had at the time of shifting removed all the inputs( as such or in the form of work in process) to Dolvi on payment of duty equal to the credit availed even after that it was left with a balance of Rs. 2,01,49,097/- which was transferred to Dolvi unit, the contention of the appellants is that the denial of credit is solely on the ground that the inputs and capital goods ought to have been transferred. This reasoning is completely flawed as the Rule 10(3) used the expression inputs or capital goods and not capital goods. The contention is that their Kamothe unit had not availed any Cenvat credit on cap....
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....eft with the balance of Rs. 2,01,49,097/- in their credit account. This credit was transferred by the unit at Taloja to their unit at Kamothe on the closure of the unit at Taloja. Thus the credit balance available with the Kamothe unit which was transferred b y unit at Kamothe to unit at Dolvi was received from Taloja unit. The appellants have admitted this fact in para 3 in their appeal memorandum. 5.1 The contention is that the credit has been transferred without transferring any input as the same was not available with them which is in clear violation of sub-rule (1) read with sub-rule (3) of Rule 10 of Cenvat Credit Rules, 2004 and therefore Cenvat Credit of aforesaid amount is not admissible. The contention is that the activity of cut....
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....y it cannot be construed that the factory has been shifted. In the instant case, no plant and machinery has been shifted from the appellant unit, Kamothe to unit at Dolvi. Therefore, merely transfer of Cenvat credit available in records without transferring any input is not admissible under rules supra. Unit at Kamothe were aware of the fact that the excisable goods cleared on payment of duty by unit at Dolvi by utilizing the Cenvat Credit wrongly transferred by them actually amounted to clearance of such goods without payment of duty, which made the goods so cleared liable for confiscation. In light of the same, Unit at Kamothe have made themselves liable for penal action under Rule 26 of the Central Excise Rules, 2002. 5.3 The contention....
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....nience:- "Rule 10. Transfer of CENVAT credit.- (1) If a manufacturer of the final products shifts his factory to another site or the factory is transferred on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of the factory to a joint venture with the specific provision for transfer of liabilities of such factory, then, the manufacturer shall be allowed to transfer the CENVAT credit lying unutilized in his accounts to such transferred, sold, merged, leased or amalgamated factory. (2) If a provider of output service shifts or transfers his business on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of the business to a joint ....