IN RE: TIRUPATI INK LTD. Vs. STATE
LAWS(CE)-2015-6-24
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on June 04,2015

In Re: Tirupati Ink Ltd. Appellant
VERSUS
STATE Respondents

JUDGEMENT

V.VALTE,COMMISSIONER - (1.)THESE proceedings were initiated after filing of appeal No. 149 -CE/APPL/Knp/2013 by M/s. Tirupati Ink Ltd., 188 -B, Dada Nagar, Kanpur (hereinafter referred to as the appellant) having Central Excise Registration No. AAACS2222FEM005, against the order -in -original No. 07/ADC/C.Ex/2013, dated 18 -3 -2013 passed by the Additional Commissioner, Central Excise, Kanpur. The appellant is engaged in the manufacture of printed ink or drawing ink and other inks, whether or not concentrated or solid printed ink, Titanium Oxide, Titanium dioxide classifiable under Chapter Heading Nos. 3215 11 90, 2823 00 10 and 2830 00 10 respectively of the First Schedule to the Central Excise Tariff Act, 1985. The appellants are also availing the Cenvat credit facility as per the provisions of the Cenvat Credit Rules, 2004. Briefly stated the facts of the case is that the appellant had a unit in the name and style of M/s. Tirupati Inks Ltd. situated at A -1/33, Dada Nagar, Kanpur, which was destroyed due to a fire incident on 21 -3 -2011, which was duly intimated to the Range Officer, Central Excise Range -I, Kanpur vide letter dated Nil by M/s. Tirupati Inks Ltd., A -1/33, Dada Nagar, Kanpur. The appellant installed and commissioned another factory in the name and style of M/s. Tirupati Inks Ltd., 188 -B, Dada Nagar, Kanpur and started production from September, 2011 and transferred the unutilized Cenvat credit of Rs. 5,50,705/ -lying in the books of M/s. Tirupati Inks Ltd. A -1/33, Dada Nagar, Kanpur. On the issue the department issued the show cause notice C. No. V(15)Off/ADJ/123/2012/11519, dated 3 -9 -2012 asking the party to show cause as to why irregular Cenvat credit of Rs. 5,50,705/ - availed by them should not be recovered under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of Central Excise Act, 1944 along with interest under Section 11AA of the Act ibid and why penalty should not be imposed under Rule 15 of Cenvat Credit Rules, 2004 and under Rule 25 of Central Excise Rules, 2002 read with Section 11AC of the Act ibid. The said show cause was decided by the ld. adjudicating authority by disallowing the Cenvat credit of Rs. 5,50,705/ - under Rule 14 of the Cenvat Credit Rules, 2004 read with the Section 11A of Central Excise Act, 1944. The interest was also confirmed under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AA of the Act. A penalty of equal amount was also imposed under Rule 15 of Cenvat Credit Rules, 2004 and under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Act.
Aggrieved by the said order of the ld. adjudicating authority they preferred appeal inter alia mainly contending that the benefit of Rule 10 of Cenvat Credit Rules, 2004 may be extended to them.

(2.)I have carefully gone through the case records and submission made by the appellant in appeal and during the course of personal hearing held on 1 -6 -2015 and attended by ld. Advocate Shri Amit Awasthi.
(3.)I find that Rule 10 of Cenvat Credit Rules, 2004 reads as under :
"Transfer of Cenvat credit. - -(1) If a manufacturer of the 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 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 case may be, the Assistant Commissioner of Central Excise."

I find that sub -rules (1) and (2) of Rule 10 of Cenvat Credit Rules, 2004 don't need any emphasis, as it is clear as crystal. It is observed from the records that a fire was broke out in the factory situated at A -1/33, Dada Nagar, Kanpur in the intervening night of 21/22 -3 -2011 due to which all the stock of raw material, work in progress and finished and capital goods installed in the said factory were damaged. It was also observed that the appellant has reversed the Cenvat credit involved in the goods destroyed in the fire incidence. I find that the department has not disputed the reversal of Cenvat credit of Rs. 7,72,179/ - involved in the destroyed goods due to fire incidence occurred in the intervening night of 21/22 -3 -2011. The department has disputed only the transfer of credit of Rs. 5,50,703/ - from the unit situated at A -1/33, Dada Nagar, Kanpur to 188 -B, Dada Nagar, Kanpur owned by M/s. Tirupati Inks Ltd. 188 -B, Dada Nagar, Kanpur. I find that the department has objected that when unit situated at A -1/33, Dada Nagar, Kanpur is still in existence then how the Cenvat credit can be transferred to another unit situated at 188 -B Dada Nagar, Kanpur in the name and style of M/s. Tirupati Inks Ltd.

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