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
The issue in this 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.
2. The brief facts are that M/S Matrix Laboratories Limited (Now M/s Mylan Laboratories limited) is a manufacturer of bulk drugs and drug intermediates falling under Chapter 29 of the Central Excise Tariff act, 1985. The Respondent is registered with Central Excise bearing Registration No.AADCM3491MEM018 w.e.f. 27.01.2010.
3. The Respondent acquired the factory premises (land) of M/s Vivin Laboratories Pvt Ltd., (Vivin Laboratories) vide sale deed dated 30.12.2009.
4. The Respondent informed the Assistant Commissioner of Central Excise about the purchase and acquisition of the entire factory of Vivin Laboratories vide letter dated 18.03.2010 and had requested for transfer of the closing balance of Cenvat Credit of Rs. Rs.1,93,75,547/- in RG 23A and 23 C Part II of Vivin Laboratories Pvt Ltd., in terms of Rule 10 of Cenvat Credit Rules, 2004.
5. The Respondent also intimated the Assistant Commissioner that entire Plant & Machinery was sold by Vivin Laboratories Pvt Ltd., to them vide their letter dated 12.01.2011 along with tax invoice to that effect.
6. The Assistant Commissioner obtained a verification report from the jurisdictional Range Officer (JRO). JRO also furnished a copy of the sale deed as proof of “change in ownership”.
7. The table below would summarize the event along with the date:
