Case Law Details
Lakshmi Machine Works Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
The issue to be decided is whether the rejection of the request to transfer the cenvat credit balance to the lessee unit is legal and proper. The provision under Rule 10 has already been noticed above. The Department has referred to the agreement between the parties to deny the permission to transfer the cenvat credit, with the reason that there is no express stipulation for transfer of all liabilities of the appellant-company to the lessee unit. On perusal of the agreement, we find that there is a clear intention between the parties to transfer the ownership of the machinery belonging to the appellant unit to the lessee unit. Such transfer is done along with transfer of raw materials, components, capital goods etc. which indicates that the lessee unit is put into the shoes of a manufacturer in the place of the appellant-company. The agreement has to be construed as to what is the intention of the parties who have entered into agreement and not by word to word analysis. On going through the entire agreement, it is clear that there is consensus ad idem to transfer the ownership along with assets and liabilities to the lessee unit.
After appreciating the facts and evidences we are of the considered opinion that the rejection of the request to transfer cenvat credit balance as per Rule 10 of CCR 2004 is without any legal or factual basis. The Department is directed to issue permission to the appellant unit to transfer credit to the lessee unit. The appeal is allowed with consequential relief, if any, as per law.
FULL TEXT OF THE CESTAT CHENNAI ORDER
The appellants were engaged in the manufacture of textile machinery and its parts. They decided to transfer the ownership of their unit to M/s.GKD ITR, Tooling Central Unit-II. Consequent to their transfer of ownership, the appellant applied for permission to transfer the entire unutilised cenvat credit to the newly transferred unit. However, the department vide letter dated 21.08.2012 informed the appellant that the permission sought for to transfer the cenvat credit is denied. On appeal, the Commissioner (Appeals) upheld the view of original authority. Aggrieved by the order of Commissioner (Appeals), the appellant has preferred this appeal before the Tribunal.
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