By TIOL News Service

MUMBAI, MAR 27, 2018: THIS is a Revenue appeal.

The respondent assessee, which was a partnership firm, was converted into private limited company and the assessee applied for transfer of the CENVAT credit, lying unutilized in their records, to the name of the present appellant i.e. newly formed company.

The jurisdictional Central Excise officer allowed the transfer of only Rs.14,348/- attributed to the inputs lying in stock on the date of transfer of ownership of the factory and rejected the balance claim of Rs.58 lakhs.

The Commissioner (Appeals) cited the provisions of rule 10 of the CCR, 2004 and held in favour of the assessee.

Revenue, in appeal before CESTAT, contends that inasmuch as the inputs were not available on the date of transfer, the credit is to be allowed only to the extent of availability of inputs.

The CESTAT held that there was no merit in the above contention of the Revenue.

Inasmuch as the Bench adverted to rule 10 of the CCR, 2004 and observed that the same permitted the assessee to transfer the available credit along with inputs and capital goods in stock at the factory to the new location; that there is no requirement under the rule that the assessee can transfer credit corresponding to the availability of the quantum of inputs.

Pointing out that the issue has been decided by the Tribunal in the case of Sunpack - 2007-TIOL-1693-CESTAT-MAD which order has been upheld by the Madras High Court - 2008-TIOL-376-HC-MAD-CX, the Bench concluded that there is no dispute about the availability of the credit to the extent of Rs.58,04,869/-.

Upholding the impugned order of the Commissioner (Appeals), the Revenue's appeal was rejected.

(See 2018-TIOL-970-CESTAT-MUM)