AI Drafter 
TaxTMI 
TaxTMI 
2022 (2) TMI 790
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....ervices. They had two other units located in Bangalore which was also registered with the Central Excise Department. Consequent to closure of the Bangalore unit on 27.5.2009, the appellant had surrendered their Central Excise registration and applied for transfer of the unutilized CENVAT credit to their second unit situated in Bangalore. Subsequently, the appellant vide their letter dated 8.12.2009 requested the Assistant Commissioner, Cuddalore Division for availing the unutilized CENVAT credit which was lying balance in their Bangalore units. The said request was denied by the Assistant Commissioner observing that only when there is sale or merger of factory or amalgamation, lease or transfer of factory etc. Rule 10(3) of CENVAT Credit Ru....
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....rders. The appellant was thus forced to close the operations at Bangalore unit. However, the Puducherry unit which was clearing goods in local market was functioning. The appellant had closed down the units at Bangalore and the manufacturing was confined to Puducherry unit. While so closing down the Bangalore units, the stock of inputs were transferred to Puducherry unit on payment of duty. They requested the Assistant Commissioner, Koramangala, Bangalore vide letter dated 12.8.2009 for permission to transfer the CENVAT Credit to its Puducherry unit. They were directed to file application before the Assistant Commissioner of Puducherry unit. Though they filed such application, the request was not allowed. Thereupon, the appellant availed th....
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....o transfer the CENVAT credit lying unutilized in his accounts to such transferred, sold, merged, leased or amalgamated business. (3) The transfer of the CENVAT credit under sub-rules (1) and (2) shall be allowed only if the stock of inputs as such or in process, or the capital goods is also transferred along with the factory or business premises to the new site or ownership and the inputs, or capital goods, on which credit has been availed of are duly accounted for to the satisfaction of the Deputy Commissioner of Central Excise or, as the case may be, the Assistant Commissioner of Central Excise." 7. It is submitted by the learned consultant that the capital goods were not transferred as the unit in Puducherry did not require t....
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.... not transferred along with inputs, the assessee is eligible to transfer the entire CENVAT credit. He prayed that the appeal may be allowed. 10. The learned AR Ms. Sridevi Tritula appeared for the department. She supported the findings in the impugned order. 11. Heard both sides. 12. Rule 10 of CEVAT Credit Rules, 2004 provides for transfer of unutilized CENVAT credit in the case of sale, merger, amalgamation, transfer of unit etc. In the present case, the appellant had closed the factory at Bangalore and transferred the inputs lying in stock to their unit at Puducherry. They then requested for transfer of the unutilized credit availed on inputs lying as balance in their unit at Bangalore. The request for transfer of CENVAT credit ....
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.... site to another. That there is ruck in the rule is a given. The question, is, how do we interpret the rule to "iron out the creases" (See Seaford Court Estates Ltd. v. Asher, (1949) 2 ALL ER 155 (CA); Ahmedabad Municipal Corporation and another v. Nilaybhai R. Thakore and another, (1999) 8 SCC 139 and Association of Natural Gas and others v. Union of India and others, (2004) 4 SCC 489). 12.7 Thus, having regard to the purpose behind the rule, which is, broadly, to enable an assessee to use unutilised Cenvat credit, we see no difficulty in holding that an assessee will be able to transfer his unutilised Cenvat credit, even in a situation, where he shifts his factory from one site to another. 13. At this juncture, Ms. Hemal....
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....on which the department has denied the transfer of unutilized credit is that the appellants have shifted on inputs and not shifted the capital goods. In the case of Ispat Industries (supra) it was held that it is not necessary that the inputs and capital goods have to be transferred. Rule 10(3) uses the expression "inputs or capital goods". The appellant in the present case has transferred the inputs into the Puducherry unit. Thus, as per Rule 10(3), they are entitled for transfer of the unutilized credit. The relevant portion of the decision in Ispat Industries reads as under:- "7. From the above it follows that the transfer of Cenvat credit shall be allowed only if stock of inputs as such or in process, or the capital goods is al....