TaxTMI 
TaxTMI 
2023 (8) TMI 994
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....ng Registration No.AADCM3491MEM018 w.e.f. 27.01.2010. 3. The Respondent acquired the factory premises (land) of M/s Vivin Laboratories Pvt Ltd., (Vivin Laboratories) vide sale deed dated 30.12.2009. 4. The Respondent informed the Assistant Commissioner of Central Excise about the purchase and acquisition of the entire factory of Vivin Laboratories vide letter dated 18.03.2010 and had requested for transfer of the closing balance of Cenvat Credit of Rs. Rs.1,93,75,547/- in RG 23A and 23 C Part II of Vivin Laboratories Pvt Ltd., in terms of Rule 10 of Cenvat Credit Rules, 2004. 5. The Respondent also intimated the Assistant Commissioner that entire Plant & Machinery was sold by Vivin Laboratories Pvt Ltd., to them vide their letter dated 12.01.2011 along with tax invoice to that effect. 6. The Assistant Commissioner obtained a verification report from the jurisdictional Range Officer (JRO). JRO also furnished a copy of the sale deed as proof of "change in ownership". 7. The table below would summarize the event along with the date: DATE DESCRIPTION 04.12.2009 The Respondent and Vivin Laboratories entered into a purchase implementation Agreement for purchase....
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....; 12.01.2011 The Respondent submitted reply letter to the Assistant Commissioner, produced copies of invoices showing the sale of plant and machinery, electrical goods, lab equipment, etc. 17.01.2011 The Assistant Commissioner issued a letter to the Respondent requesting to furnish copies of the inventory ledger for the month of December 2009 of Vivin Laboratories showing the details of the stock and capital goods etc., in their possession at the time of transfer to the Respondent. 11.03.2011 The Assistant Commissioner denied the transfer of CENVAT credit vide letter No. V/30/15/2009 01.04.2011 The Respondent availed cenvatcredit of Rs.1,83,70,133/- lying in the closing balance of Vivan Laboratories. 10.05.2011 The Respondent filed an Appeal against the letter of the Assistant Commissioner dated 11.03.2011 challenging the rejection of transfer of credit under Rule 10 of CCR, 2004. 29.08.2011 The Commissioner (Appeals) allowed the appeal of the Respondent vide the impugned order. 25.10.2011 The Respondent submitted a letter to Assistant Commissioner pursuant to impugned OIA, submitting invoic....
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....nsferred full legal and beneficial title and ownership of all assets to Matrix. In terms of Sale deed dated 30.12.2009, sale of land was executed and the sale of Plant, Machinery etc was done on the strength of invoice dated 30.12.2009. Therefore, the factory remained the same (in the same premises) and there is merely change in the ownership as a result of sale and the business is continued by the assessee in the same premises. (d) No documents have been prescribed in Rule 10(1) of CCR, 2004 on the strength of which sale, merger, amalgamation etc., should take place. Hence, it is found that the sale of the complete assets and both immovable and movable properties is complete on the strength of these documents. (d) In terms of Rule 10(3) of CCR, 2004 Cenvat Credit shall be allowed if the stock of inputs as such or in process, or the capital goods is also transferred along with the factory. In this case, the premises remains the same and the line of manufacturing activity remaining the same, except for transfer of ownership. (e) There were no inputs, inputs in process lying in stock at the time of transfer. Thus, a combined reading of Rule 10(1) and (3) of....
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....algamation, 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 venture with the specific provision for transfer of liabilities of such business, then, the provider of output service shall be allowed to 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 ....
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..../s Matrix favour. Hence, the impugned Commissioner (Appeals) Order-In-Appeal is liable to be set aside on this count alone. 11.2 M/s Matrix have not submitted any document of indicate/nor any evidence prescribing specific provision for transfer of liabilities of such factory. In the absence of such a specific provision, the transfer of Cenvat credit to M/s Matrix from M/s Vivin Labs is not tenable and erroneous in Law. 11.3 M/s Matrix, could not produce any document, to correlate the items mentioned in the annexures enclosed to the Invoices against which the plant and machinery was sold, with entries made in RG 23 C Part II extracts (Capital Goods Register) of M/s Vivin Labs, furnished by M/s Matrix, as recorded by the Assistant Commissioner in the Order-In- Original dated 11.03.2011. 11.4 In fact, the Sale Deed dt.30.12.2009, contains specific clauses that the transfer of the factory is without any encumbrances, attachments, charges, claims and demands and the Seller i.e. Vivin Labs shall Indemnify and Keep Indemnified the buyer Matrix against all claims, losses, liabilities, costs, damages or actions or proceedings 11.5 The Commissioner (Appeals) has remanded the matt....
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....ital goods and they had transferred these materials along with the credit balance available. This was in accordance with law." (para 6). (ii) Hon'ble Supreme Court of India Larger Bench in the case of M/s Dharmendra Textile Processors, reported in [2008 92310 E.L.T.3(S.C.)], held as follows; "13. It is a well-settled principle in law that the court cannot read anything into a statutory provision or a stipulated condition which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent........" 14. ...........The intention of the legislature is primarily to be gathered from the language used, which means that attention should be paid to what has been said as also to what has not been said. As a consequence, a construction which requires for its support, addition or substitution of words or which results in rejection of words as meaningless has to be avoided. As observed in Crawford v. Spooner (1846) 6 MOO PC 1, the courts cannot aid the legislature's defective phrasing of an Act, they cannot add or mend, and by construction make up deficiencies which are left there. (Se....
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....the transfer of cenvat credit shall be allowed in case of the inputs or the capital goods is also transferred along with the factory premises to the new ownership and the inputs, or capital goods, on which credit has been availed of are duly accounted for. 13.2 It is humbly submitted that there is no specific stipulation contained in Rule 10 that prior permission is required from the statutory authorities for transferring the Cenvat credit as a result of amalgamation/merger. In this regard, the Respondent places reliance on the following decisions: (i) S.C. Johnson Products (P) Ltd. vs. CCE, Chandigarh, 2016 (337) E.L.T. 422 (Tri. - Del.) (ii) Sree Ram Industries vs. CCE & ST, Bangalore-V, 2019 (365) E.L.T. 616 (Tri. - Bang.) (iii) Hewlett Packard (I) Sales (P) Ltd. vs. Commissioner of Customs, Bangalore, 2007 (211) E.L.T. 263 (Tri. - Bang.) which was affirmed by the Hon'ble High Court of Karnataka in 2012 (279) E.L.T. 203 (Kar.) (iv) Solaris Bio-chemicals Ltd. v. CCE, Vadodara - 2005 (179) E.L.T. 216 (Tri. - Mumbai) (v) Om Glass Works Pvt Ltd. vs. CCE, Kanpur, 2012 (279) E.L.T. 313 (Tri. - Del.) (vi) Kiran PondyChems Ltd. Vs....
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....se. (b) There is a transfer of liabilities of such factory. (c) CENVAT credit is lying unutilized in the accounts to such transferred, sold, merged, leased or amalgamated factory. (d) The stock of inputs as such or in process, or the capital goods is also transferred along with the factory 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. 16. It is further submitted that the premises of Vivin Laboratories was transferred pursuant to sale deed dated 30.12.2009 and even though plant and Machinery were not transferred under the sale deed, the same were sold through invoice nos. 100 and 101 dated 30.12.2009 and the annexure detailing the breakup of plant and machinery and assets are also available. Therefore, the ownership of the factory was transferred by way ofsale deed dated 30.12.2009 and on the same day, the capital goods were also transferred through the invoices. 17. It is pertinent to note that under Rule 10 of CCR, there is no requirement that the premises and the capit....
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.... - 2009 (237) E.L.T. A48 (S.C.)]. Even when no inputs are lying in stock, transfer of cenvat credit in respect of inputs cannot be denied. 22.1 The Respondent submitted that there were no inputs lying in stock on the date of transfer of premises to the Respondent and the said fact was also verified by the Range Officer's Report, however, the JAC kept asking the Respondent to provide stock ledgers of Vivin Laboratories, even though the returns for availing cenvat credit in respect of the inputs as filed by Vivin Labs was available with the department. 22.2 Even otherwise, when no stock of raw material relating to credit is available, request for transfer of unutilized credit cannot be denied. A plain reading of Rule 10 clearly shows that there is no such mandatory requirement of physical transfer of inputs or capital goods at the time of transfer of credit. If stock of inputs as such or in process or capital goods are available at the time of application of transfer of unutilized credit, the same should also be transferred to the new ownership. If there are no such inputs or capital goods available and only Cenvat Credit alone is lying unutilized at the time of transfer of ....
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....uld not be refused. For statistical purposes, where in such cases there is no stock of inputs, the transfer entry would show transfer of "Nil" stock." (c) CCE Vs. Dr. Reddy'sLaboratoriesltd, 2005 (191) ELT 660 (Tri.Che) (d) AAR AAY Products Pvt. Ltd. V/s. CCE, 2003 (157) ELT 40 (Tri.Del) (e) Apco Industries Ltd Vs CCE, 2004 (177) ELT 647 (Tri.Mum) (f) New Chem Industries Ltd s. CCE, 2005 (191) ELT 614 (Tri.Mum) (g) CCE Vs. Smithkline Beecham Consumer Health Care Ltd., 2007 (209) E.L.T. 96 (Tri. - Chennai) No requirement for specific provision for transfer of liabilities. 23. The revenue has contended that there should be a specific provision for transfer of liabilities to the new ownership, which is a precondition for transfer of cenvat credit, without satisfying the said condition, benefit of transfer of credit cannot be given by liberal interpretation through vague understanding of terms. 24. Rule 10(1) of the CCR provides that transfer of unutilized cenvat credit was permissible in case of transfer of ownership on account of a merger/amalgamation with a specific provision for'transfer of liabilities of such factory'. 25. T....
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.... or other boundaries of a place or building, esp. of place of warship; boundary; (pl.) environs. 2. (town planning) Area from which main-road (or all) traffic is excluded. 3. Subdivision of county or city or ward for election and police purposes. - The New International Webster's Comprehensive Dictionary of the English Language 1. A place definitely marked off by fixed lines; also, the boundary of a designated place. 2. A minor territorial or jurisdictional district. 31. Therefore, only the liabilities in respect of the premises transferred by Vivin Laboratires to the Respondent, such as lien over property, encumbrances etc. were to be taken into consideration for the purpose of Rule 10 of CCR, rather than all the liabilities of the Company such as creditors, loans etc. 32. In the present case, it is to be noted that there were no outstanding liabilities existing in respect of the factory on date of transfer, as has been stated in para 5 of schedule 3 of the sale deed and the same is extracted below for ease of reference: "5. Outgoings There is no outstanding liability for any rent, service charge, insurance rent, rates or taxes other outgo....
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....of the impugned credit within 10 days from receipt of this order to enable the JAC to quantify the cenvat credit to be transferred and pass an order to that extent." 38. From the above, it is evident that the Appellate Authority had clearly provided the scope of verification to be undertaken by the original authority while remanding the matter vide the impugned order. The Original authority was merely required to quantity the admissible cenvat credit that could be transferred to the Respondent based on the information/documents provided by the Respondent vide their letter dated 25.10.2011. 39. When the Appellate Authority has taken into consideration the project implementation agreement while passing the impugned order and directed the original authority to consider the documents submitted by the Respondent pursuant to the impugned order, the Appellant Department has erred in submitting that the transfer of cenvat credit is to be rejected since the project implementation agreement was not submitted to the original authority. 40. The Range Officer had visited the factory premises which were transferred to the Respondent and had observed that there were no stock of inputs ly....