Cenvat credit admissible to transferee on account of change of ownership

Commissioner of Customs Vs Matrix Laboratories Ltd. (CESTAT Hyderabad)

CESTAT Hyderabad held that CENVAT Credit in the books of the transferor is duly available to the transferee on account of change of ownership as per Rule 10 of the Cenvat Credit Rules.

Facts- The issue in the present appeal by Revenue is whether the appellant is rightly entitled to cenvat credit which was available in the books of accounts of one Vivin Laboratories Private Ltd., as they have taken over the plant and machinery of the said company on outright sale basis, including transfer of land.

Conclusion- Held that the Respondent is the successor owner of the factory of Vivin Laboratories, with its assets and liabilities (which is nil on date of transfer), due to change of ownership on account of sale. We also hold, Rule 3 of CCR is not applicable in the facts of the present case, as Rule 3 applies in case of ‘removal’ of capital goods. Here there is no removal, as the capital goods remained in the same factory/premises, and there is only change of ownership. Thus, we hold that the respondent-assessee is entitled to take transfer of Cenvat Credit available in the books of the transferor – Vivin Labs, as per Rule 10 of Cenvat Credit Rules.

FULL TEXT OF THE CESTAT HYDERABAD ORDER

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