Customs, Excise and Gold Tribunal - Tamil Nadu
Sunpack vs Commissioner Of Central Excise on 7 September, 2007
Equivalent citations: 2007(123)ECC109, 2007(149)ECR109(TRI.-CHENNAI), 2008[9]S.T.R.166
ORDER P. Karthikeyan, Member (T)
1. After hearing both sides, I dismiss the stay application and take up the main appeal for final disposal with the consent of both sides.
2. The subject application has been filed by M/s. Sunpack, Pondicherry to waive predeposit to hear its appeal against the order of the Commissioner (Appeals) dated 12.3.2007. In the impugned order, on appeal filed by the Department, the Commissioner had confirmed a demand of Rs. 3,89,970/- being the excess credit compared to the credit corresponding to the inputs transferred by the appellants in their Cenvat Credit account when the factory was shifted to a new premises on 1.4.2004. In the order of the original authority, the Joint Commissioner had dropped the proposals to recover the said credit on the ground that the assessee had satisfactorily accounted for the credit as well as the inputs and capital goods received by them and transferred to the new premises. The original authority had found that the assessee had fulfilled the conditions stipulated under Rules 8(1) and (2) of Cenvat Credit Rules, 2002.
3. Ld. Counsel for the appellants submits that the jurisdictional Range Superintendent had visited their factory and verified the stock of inputs and capital goods and the credit transferred. He had reported the position to the jurisdictional Deputy Commissioner. The Joint commissioner had dropped the proceedings after perusing also the reports sent by the appellants to the Deputy Commissioner on the same subject.
4. Ld. SDR reiterates the findings contained in the impugned order.
5. I have studied the case records and the submissions made by both sides. I find that the appellants had shifted their factory to a different location and had transferred the capital goods and the inputs available in stock along with the credit available in their Cenvat account. The inputs and capital goods were accounted for to the satisfaction of the departmental authorities as is seen from the order of the original authority. The impugned order has demanded the credit transferred into the Cenvat account of the new factory in excess of the credit corresponding to the physical stock of inputs transferred. This has been done purportedly in terms of Rule 8 of the Cenvat Credit Rules, 2002.
6. The Cenvat credit Rules 8 reads as follows:
"Rule 8. Transfer of Credit"
(1) If a manufacturer of final products shifts his factory to another site or the factory is transferred on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of 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) The transfer of cenvat credit under Sub-rule (1) shall be allowed only if the stock of the inputs as such or in process or the capital goods is also transferred along with the factory 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 Commissioner.
The Rule does not require that the assessee can transfer credit corresponding only to the quantum of inputs transferred to a new factory. The rule permits the assessee to transfer the available credit along with inputs and capital goods in stock at a factory to the factory at a new location. In the instant case, the finding of the authorities is to the effect that the appellants had satisfactorily accounted for the inputs and capital goods and they had transferred these materials along with the credit balance available. This was in accordance with law. In the circumstances I find that the impugned order is not sustainable and accordingly I set aside the same. The appeal is allowed.
(Dictated and pronounced in open court)