Custom, Excise & Service Tax Tribunal
M/S Goldensun Cosmos Machinery Pvt Ltd vs C.C.E. & S.T.-Vadodara-I on 30 January, 2018
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Zonal Bench 2nd Floor, Bahumali Building, Nr Girdharnagar Bridge, Asarwa Ahmedabad 380 004 Appeal No. : E/11662/2015 Arising out of OIA-VAD-EXCUS-001-APP-212/2015-16 dt 11/08/2015 passed by the Commissioner of Central Excise, Customs and Service Tax-VADODARA-I M/s Goldensun Cosmos Machinery Pvt Ltd - Appellant(s) Vs C.C.E. & S.T.-Vadodara-I - Respondent(s)
Represented by For Appellant(s) : Shri Dhaval Shah, Advocate For Respondent(s) : Shri J Nagori, Authorised Representative CORAM :
Dr D.M. Misra, Hon'ble Member (Judicial) Date of Hearing / Decision : 30/01/2018 ORDER No. A/10219 / 2018 Per : Dr D.M. Misra, This appeal is filed against OIA-VAD-EXCUS-001-APP-212/2015-16 dt 11/08/2015 passed by the Commissioner of Central Excise, Customs and Service Tax-VADODARA-I.
2. The brief facts of the case are that the appellant had two units registered separately under Central Excise Act situated at 991/1/B-1, GIDC, Makarpura, and another at 68/B/2 Padra Road, Atladra. The manufacturing activities at Makarpura unit had been closed and the factory was shifted to Atladra on 26.10.2010 and thereafter the appellant has surrendered Central Excise registration of Makarpura unit on 02.02.2011. The appellant paid duty amounting to Rs 14,68,475/- and Rs 63,500/-with interest as demanded by the J&CH, Customs, Mumbai for the past period, when the appellant had earlier imported duty free materials at their previous Head Office at Makarpura. After payment of the said amount, the appellant had availed credit of Rs 47,516/- paid against Challan dt 08.08.2011 on 20.8.2011 and the credit of Rs 10,77,508/-paid against challan dt 11.11.2011, on 18.11.2011, respectively. Alleging that at the time of shifting/transfer of the unit on 26.10.2010, there was no unutilized credit in their Cenvat records, therefore, cenvat credit is not admissible on the differential duty paid subsequently since the case does not fall under Rule 10 of the Cenvat Credit Rules 2004. Consequently, demand notices were issued for recovery of the said credit with interest and proposal for penalty. On adjudication, the demand was confirmed with interest penalty. Aggrieved by the said order, the appellant filed an appeal before the Ld Commissioner (Appeals), who in turn, rejected their appeals, hence, the present appeals.
3. The Ld Advocate Shri D Shah for the appellant submits that the authorities below has misunderstood and misinterpreted the facts of the case, and wrongly applied Rule 10 of the Cenvat Credit Rules 2004. It is his contention that Makarpura unit was closed way back on 26.10.2010 and the registration was surrendered on 02.02.2011. After transferring all assets and liabilities of Makarpura unit in favour of Atladra unit, both the units merged and being under the same management, thus, the Makarpura unit on closing down its business and shifting of the factory to Atladara unit, with effect from 02.02.2011, be considered as one and the same Unit. It is his contention that therefore the liability of discharging customs duty pertaining to closed Makarpura unit, became that of the appellants Atladara Unit, even though factory was closed and Central Excise registration was surrendered for Makarpura unit. Therefore, credit of duty discharged on August 2011 and November 2011 by the Atladra unit, definitely available to the appellants said Unit.
4. The Ld AR for the Revenue reiterated the findings of the Ld Commissioner (Appeals).
5. Heard both sides and perused the records.
6. I find that undisputedly the appellants Makarpura unit, where their Head Office was initially situated closed down on 26.10.2010 and surrendered its registration on 2.2.2011 after shifting the office to their new unit at Atladra. No doubt, at the time of shifting of the factory from Makarpura, whatever credit lying in balance had been transferred to the Atladara unit, but liability later discharged on August 2011 and November 2011 for imports made in the past by the said Unit cannot come under the scope of Rule 10 of the Cenvat Credit Rule 2004 in as much as on the date of shifting of the factory, there was no occasion to discharge differential duty being not demand by customs nor there was any occassion to avail credit in the books of accounts at Makarpura unit. Therefore, credit is definitely admissible on the differential duty paid after shifting of their unit of Makarpura Unit and its merger with Atladra Unit. It is difficult to appreciate the contention of the Revenue that even if the Makarpura unit is no more in existence and closed down its business, but the outstanding customs dues for the past period could be recoverable but the differential duty cannot be admissible to the successor unit of the same company at Atladara.
7. In the result, the impugned order is set aside and the appeal is allowed.
(Dictated and pronounced in the open Court) (D.M. Misra) Member (Judicial) swami 4