Case Law Details
WIPRO Ltd Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Chennai held that the CENVAT Credit lying in balance as on the date of de-bonding of 100% EOU and conversion to DTA unit is transferable to the DTA unit.
Facts- The appellant is engaged in the manufacture of hydraulic cylinders and pars. They are availing CENVAT credit on inputs, capital goods and input services. M/s. WIPRO Infrastructure Engineering Ltd. which was having central excise registration had an EOU unit which was also engaged in manufacture of hydraulic cylinders. They later got converted into DTA Unit. In the same premises, their Plant – II which is a DTA unit was engaged in the manufacture of hydraulic cylinders and registered with the Central Excise Department. The appellant requested the Deputy Commissioner, Poonamallee Division after exit as EOU unit, for the merger of these two units which was accepted by the department. Subsequently, merger took place with effect from 27.3.2008. The appellant had transferred the CENVAT credit which was lying in Plant – I, which was earlier an EOU unit to their merged DTA unit.
The department was of the view that as per sub-rule (3) of Rule 10 of CENVAT Credit Rules, 2004, only if the ownership of capital goods / inputs are transferred to the other unit, the assessee would be eligible to have the credit transferred. The credit so transferred to the appellant-unit appeared to be not legal and proper.
Show Cause Notice was issued proposing to recover the transferred credit along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand along with interest and imposed penalty. Aggrieved by such order, the appellant is now before the Tribunal.
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