At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi
By, THE HONORABLE JUSTICE: S.K. MOHANTY
By, MEMBER AND THE HONORABLE JUSTICE: B. RAVICHANDRAN
For Petitioner: Amit Jain, Advocate And For Respondents: R.K. Manjhi, DR
1. These two appeals are dealing with identical set of facts and hence are taken up together. The appellants are engaged in manufacture of motor vehicle components liable to Central Excise duty. They had two manufacturing facilities - Surajpur and Sohna. In 2005, the Govt. announced a policy of setting up of Large Tax Payers Units (LTU) in major cities to give single window service to large tax payers with reference to Central Excise, Service Tax and income tax matters. In pursuant to the said policy, the industry was asked to give their option to join the LTU at New Delhi in 2006. However, the LTU at New Delhi become operational only in June 2008. On 11.06.2008 the Chief Commissioner LTU, New Delhi accepted the appellant in the LTU jurisdiction. In the meantime, the appellant started another manufacturing unit at Pune in January 2007. Since no LTU was operational at that time and their option to join LTU was yet to fructify they have taken separate registration for the said of Pune Unit from the local Jurisdictional Office of Central Excise. In November, 2008, the appellants wanted to transfer some of the cenvat credit amount lying in the accounts of Pune Unit to the other two units at Surajpur and Sohna. They had a meeting with the Commissioner LTU. The matter regarding non-mentioning of Pune Unit in the original consent came up. The appellant accordingly, filed the request for on 26.11.2008 including the Pune Unit. On 27.11.2008 they have requested the Additional Commissioner LTU for transfer of Rs. 3 Crores from cenvat account of Pune Unit to other two units. The Revenue entertained a view that the transfer of credit from one unit to another unit of LTU of assessee is permissible only after all the units were duly registered with the LTU and accordingly, proceedings were initiated against the appellant to deny the credits transferred in November 2008 and June 2009 to August 2009. Impugned orders denied the credit so transferred on the ground that such transfers are not covered by the legal provision of Rule 12A(4) of Cenvat Credit Rules, 2004.
2. The Ld. Counsel for the appellant submitted that there is no dispute regarding the eligibility of credit availed by the appellants in their various units. The present dispute relates only to their entitlement for transfer of credit from one unit to another unit in view of the facilitation provided for the units registered with LTU. The Pune Unit was not part of the initial consent letter as it was not operational at that time. When the LTU was started and their initial consent was agreed upon by the Chief Commissioner LTU, it necessarily follows that all the units come under the legal jurisdiction of LTU, New Delhi. The Ld. Counsel further relied on the Circular dated 05.10.2006 issued by the CBEC explaining the scope and background of setting up of LTU. The said circular specifically stipulates that once the tax payer acquires a status of LTU, the tax matters in respect of all his manufacturing units throughout the country stands transferred to LTU. Further, it is submitted that the LTU concept is a facilitating step any procedural lapse, if at all, cannot be the ground for denial of legitimately available credit for utilization by the appellant. Reliance was placed on the decision of Hon'ble Bombay High Court in Sharda Motor Industries Ltd : 2011 (267) ELT 634 (Bom.). The Hon'ble High Court allowed transfer of credit in similar set of facts.
3. The Ld. AR reiterated the findings of the lower authorities. He submitted that the transfer of credit is not in terms of Rule 12A(4) of Cenvat Credit Rules, 2004 as the revised registration including Pune Unit was issued to the appellant only in September, 2009.
4. We have heard both the sides and perused the appeal records.
5. The only issue for decision in these appeals is that whether the appellants are right in transferring the portion of their credit available in Pune factory to other two factories, all three being part of single point registration under LTU, New Delhi. Admittedly, the denial is only on the ground that such transfer was done before formal addition of Pune Unit in the revised registration. Having the background of facts as narrated above, it is clear that though the consent for registration in LTU was called for in 2006 itself, the LTU became operational in New Delhi only in 2008. The consent letter of the appellant was approved and the appellant become part of LTU thereafter. The development in between, by way of another manufacturing unit at Pune, was not actually part of initial consent letter given by the appellant. The appellants had discussion with the officers of LTU and did give revised fresh consent letter including Pune Unit also to be part of LTU. Thereafter only they have transferred the credit from Pune Unit using the facility available to LTU assessee. We note that though the revised consent was filed by the appellant on 26.11.2008, the department did not provide any reply or accept the said consent till September, 2009. We note the Circular dated 05.10.2006 states that generally such consent are accepted within one week. In any case, it is clear from the overall scheme mentioned in the circular that upon enrolling as a assessee in LTU, all the units of the assessee will fall under Jurisdiction of LTU. The non-mentioning of Pune Unit in the original consent letter is due to the fact that at that time the unit was not in existence. Later the same was added, intimation was given to the officers of LTU, the credit was transferred, thereafter only. In such situation, we find no reason to deny the transfer of such credit which is otherwise legitimately available to t
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he appellant. We also referred to the decision of the Hon'ble Bombay High Court in Sharda Motor Industries Ltd.(supra). The High Court examined and held that such objections by the Revenue is purely based on hyper technical approach and a beneficial procedure cannot be denied on such narrow campus. 6. As noted above in details we find that there is no violation of any provisions or any serious threat to the Revenue of the Govt. in such transfer which involves procedure available to the units enrolled in LTU. Accordingly, we find no merit in the impugned orders and set aside the same. The appeals are allowed.