Facts:- Appellant is engaged in the manufacture of pharmaceutical products and bulk drugs falling under Chapter 29 of Central Excise Tariff Act. It avails credit on inputs, packing materials, etc. The unit was converted into 100% EOU and its entire stock of inputs was transferred to EOU without reversing the credit availed thereon.
A show cause notice was issued demanding the reversal of the credit availed on inputs which were transferred to EOU on conversion of DTA unit. On adjudication, the demand was confirmed along with the applicable interest and penalty. Commissioner (Appeals) also upheld the adjudication order. Appellant therefore challenged the appellate order before the Tribunal.
Held:- The Tribunal held that inputs on which credit availed was availed by the DTA unit were never removed from the premises of the DTA unit at the time of its conversion into an EOU. Thus, there was no contravention of any of the provisions of Cenvat Credit Rules, 2004. Further, no provision contained in the Cenvat Credit Rules, 2004 contemplates reversal of credit availed on inputs by a DTA unit at the time of its conversion into EOU.
Authority:- Sun Pharmaceutical Industries Ltd. Vs. Commissioner of Central Excise, Puducherry – 2009 TIOL 1613