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CUSTOM EXCISE & SERVICE TAX APPELLATE TRIBUNAL, BANGALORE
P.G. CHACKO, J.
Commissioner of Central Excise, Tirupati -Appellant
Versus
Megha Engineering & Infrastructure Ltd. -Respondent
Stay Order No. 1477/2012, Application No. E/Stay/59/2012 and Appeal No. E/152/2012, 1477 of 2012, E/Stay/59 of 2012, E/152 of 2012
Decided On : 31-08-2012
Ms. Sabrina Cano
1. This application filed by the Department (appellant) seeks stay of operation of the impugned order. There is no representation for the respondent despite notice. I have examined the records and heard the learned Superintendent (AR).
2. It is submitted that the respondent-company had more than one manufacturing units at the material time, that two of such units were closed down and the registration certificates surrendered to the Department, that an application was made before the jurisdictional Assistant Commissioner for transfer of the unutilized Cenvat credit of the closed units to a surviving unit, that upon physical inspection, no stock of inputs or unprocessed materials were found in the closed units and that in the circumstances the said application was rejected by the original authority. It is further submitted that the learned Commissioner (Appeals) set aside the order of the original authority, that his decision violates the provisions of Rule 10(3) of the Cenvat Credit Rules, 2004 and that, unless the operation of this order is stayed, the respondent will take undue benefit.
3. On a perusal of the records, I find that it is not in dispute that the application for transfer of unutilized Cenvat credit was given after surrender of registration of the factories. Where the registration of a factory is surrendered, prima facie, no factory as defined under the Central Excise Act subsists to be transferred. Sub-rule (1) of Rule 10 ibid contemplates transfer of unutilized Cenvat credit upon shifting of factory to another site or transfer of its ownership to another person. Sub-rule (3) states that such transfer of Cenvat credit shall be allowed only if the stock of the inputs as such or the inputs in process or the capital goods is also transferred along with the factory to the new site or along with the transfer of ownership of the factory to another person. Prima facie, the argument put forth by the learned Superintendent (AR) on the basis of these provisions of law are valid.
4. The stay application is allowed.
