Order Date – 06 February 2023

Parties: Transformers & Rectifiers India Limited Vs Commissioner of Central Excise & ST, Ahmedabad

Facts –

• The Appellant, Transformers & Rectifiers India Limited, was denied Cenvat credit by the Revenue on the ground that Cenvat credit of other unit i.e. Moriya unit was transferred to appellant’s unit before the due date and utilized the same for payment of duty in terms of Rule 10A of Cenvat Credit Rules, 2004.

Issue –

• Whether the appellant is entitled Cenvat credit?

Order –

• The Tribunal observed that the reason for denial was that credit was transferred two months before the period prescribed under Rule 10A of Cenvat Credit Rules. In the present case, for the quarter ending December 2013, instead of transferring credit on 31.12.2013, it was transferred on 31.10.2013. Similarly for the quarter ending September 2014, instead of transfer of credit on 30.09.2014 it was transferred on 31.07.2014.
• The transfer of credit from one unit to another unit of the same assessee company in terms of Rule 10A is only a procedural requirement and it is not a case of any fresh payment of duty. The credit which is transferred is in respect of duty which was already paid. Therefore, by transfer of credit there is no Revenue implication.
• For the early transfer of credit and availment thereof, the appellant has admittedly paid the interest. Therefore, only for early transfer, credit cannot be denied.
• Further, it is on the part of the transferor unit against which the audit had already raised the issue and on payment of interest the issue was settled and no further action was taken against the transferor unit.
• Hence the appeal is allowed.