TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 994
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....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 of the assets of Vivan Laboratories and other rights exe....
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....roduced 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 invoice copies, ER-1 Returns and purchase implementation agreement for quantification of cenvat credit as per the directions....
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.... 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 CCR reveal that the transfer of accumulated Cenvat Credit on inputs is automatic. With regards to Capital Goods, the jurisdictional officer has already furnished a report recommending transfer. If the JAC is not sa....
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.... 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 case may be, the Assistant Commissioner of Central Excise. (4) Subject to the provisions contained in sub-rule (3), the transfer of the CENVAT Credit shall be allowed within a period of three months from the date of receipt of application by the Deputy Commissioner of ....
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....ic 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 matter for quantification of without any scope for verification of facts. The eligibility for transfer of Cenvat credit could not be completed by the Original authority i.e. Assistant Commissioner, on account of non-submission of documents including "Project Implementation Agreement", which was only submitted before the....
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....n 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. (See State of Gujarat v. DilipbhaiNathjibhai Patel - 1998 (3) SCC 234). It is contrary to all rules of construction to read words into an Act unless it is absolutely necessary to do so. [See Stock v. Frank Jones (Tipton) Ltd. - 1978 (1) ALL ER 948.] Rules of interpretation do not permit the courts to do so, unless the provision as it stands is meani....
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....mission 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 CCE, 2009 (239) ELT 192 (Tri. - Chennai) (vii) Capital Transformers Pvt Ltd Vs CCE, Alwar [2019(1) TMI 616-Cestat New Delhi]. Amendment to Rule 10 of the CCR 13.3 It is pertinent to note that an amendment was made to Rule 10 of the CCR in terms of CENVAT Credit (Amendment) Rules, 2017 vide the Notification No.4/2017-CE (NT) w.e.f. 02.02.2017 and sub-Rule (4) was inserted in Rule 10 as un....
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....ioner 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 capital goods are to be transferred through a common document. There is no bar on transfer of premises and the capital goods by separate instruments. Correlation is not a mandatory requirement. 18. The revenue has contended that without co-relation of value of capital goods with the invoices, credit was rightly denied. It is humbly submitted that the Respondent received all the capital goods available at the factory premises on the date of the transfer,....
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....edit 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 the factory, even then, the unutilized credit is to be transferred. The transfer of credit cannot be denied on the ground that there was no input available at the time of transfer of factory. 22.3 In this regard, reliance is placed on the following decisions: (a) Tera Cables India Pvt Ltd. vs. CCE, Ahmedabad, 2010 (258) E.L.T. 111 (Tri. - Ahmd.) which was affirmed by the Hon'ble Gujrat High Court in Commissioner v. Tera Cables India Pvt. Ltd. - 2014 (299) E.L.T. A61 (Gu....
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..... 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. Therefore, only the liabilities limited to the 'factory' premises which were transferred to the Respondent are to be considered for the purpose of Rule 10 of the CCR and not the outstanding liabilities of M/s. Vivin Laboratory. 26. In this regard, reference should be made to the definition of 'Factory' as provided under Section 2(e) of the Central Excise Act, 1944: "Factory" means any premises, including precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured, or wherein or in any part of ....
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....operty, 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 outgoings in respect of the property." 33. Even otherwise, the Respondent has submitted a letter of undertaking with their letter dated 18.06.2010 they had undertaken any to discharge any liabilities arise in the future on account of acquisition of the premises of Vivin Labs. 34. Additionally, Vivin Laboratories has also provided an undertaking that there were no outstanding liabilities including liabilities towards creditors pertaining to the premises on the date of transfer to the Respondent. Interpretation of procedure prescribed under Rule 10 of CCR. 35. The Revenue has contended that they are not disputing the claim of the Responde....
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....on 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 lying in stock on the date of the transfer and that the entire inputs were consumed or cleared on payment of duty. Further, the Range Office had also observed that the capital goods were installed in the factory premises which were transferred to the respondent. However, without giving any finding or recording reasons, the original authority failed to consider the said observations of the range officer. 41. Further, since no documents are prescribed under the Rule on the strength of which transfer can be claimed, the Appellate Authority was satisfied based on the documents submitted by the Respondent that transfer of credit was available. 42. Therefore, th....