2014 (12) TMI 198

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....r reply to show-cause notice took a stand before the adjudicating authority that Bangalore Unit transferred its unutilized credit to the Pondicherry Unit under Rule 10(1) of the CENVAT Credit Rules. The adjudicating authority confirmed denial of CENVAT credit and ordered recovery with interest and penalty. 2. The learned counsel submits that the Tribunal in various decisions observed that the transfer of unutilized credit on account of shifting of the factory would cover Rule 10 of the CENVAT Credit Rules. In this context, he relied upon the following decisions:-           (a) CCE Vs. CESTAT - 2009 (240) ELT 367 (Mad.)         (b) Ispat Industries Ltd. ....

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.... of unutilized credit of inputs lying with CENVAT account of the Bangalore Unit. He also submits that both the Assistant Commissioners at Bangalore and Pondicherry have rejected the request for transfer of CENVAT credit and inspite of rejection, the applicant has availed the credit. He further submits that none of the case relied upon by the learned counsel would not be applicable to the present case, as there was no shifting of the factory. 4. After hearing both sides and on perusal of the records, we find that the issue involved is whether the applicant is eligible to avail unutilized CENVAT credit transferred by their Bangalore Unit under Rule 10 of the CENVAT Credit Rules, 2004. For proper appreciation, Rule 10 of the CENVAT Credit R....

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....f Central Excise or, as the case may be, the Assistant Commissioner of Central Excise. 5. On plain reading of the sub-Rule (1) of Rule 10, it is clear that transfer of CENVAT credit is allowed to a manufacturer, if the manufacturer of the final products shifts his factory to another site then the manufacturer shall be allowed to transfer the CENVAT credit lying unutilized in the accounts of such transferred factory. In the present case, the adjudicating authority observed that the manufacturing factory at Bangalore was not shifted on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of the factory to a joint venture as well as there was no shifting of the said manufacturing activities at Banga....