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Judgment
The respondent-assessee had units in different parts of the country. By application dated 17-3-2006, the respondent-assessee filed their consent to be administered in the Large Taxpayers Unit at Delhi. The said consent mentioned the plants at Chennai, Gurgaon, Nasik, Haridwar and Greater Noida with details of their registration with the Central Excise and Service Tax Authorities. Subsequently, the appellant-revenue issued Notification No. 20/2006-C.E. (N.T.), dated 30-9-2006 which incorporated conditions and stipulations regarding consent for being administered under the Large Taxpayer Unit at Delhi. After more than two years, Chief Commissioner, Large Taxpayer Unit accepted the application and thereupon, the respondent-assessee was to be assessed in the said unit. In the meanwhile, it appears that the respondent-assessee had set up three new units after the initial application was filed on 17-3-2006. In these circumstances, a fresh list of the units was circulated and furnished to the appellant i.e. the Commissioner, Large Taxpayer Unit on 17-7-2009. Subsequently, the Adjudicating Authority of Large Taxpayer Unit noticed that the respondent-assessee has transferred Cenvat Credit of Rs. 4.4 Crores from Kancheepuram and Nasik Units. These two units and Singur unit were not mentioned in the application which was filed on 17-3-2006 as they were new units. The appellant-revenue does not dispute that the assessee would be entitled to Cenvat Credit but a technical plea is taken and raised that these units were not mentioned in the original application dated 17-3-2006, but were included in the revised or fresh list, which was submitted on 17-7-2009. The claim of the appellant-revenue is that the assessee should not be granted Cenvat Credit, which is normally, available under the Rules for the reason that Nasik and Kancheepuram units were not included in the original list. Counsel also relies upon the notification dated 30-9-2006, which as noted above, was issued after the respondent-assessee had filed their application on 17-3-2006.
As far as Nasik unit is concerned, the said unit had filed a writ petition being W.P. No. 9450/2010, titled Sharda Motor Industries Ltd. Vs. Union of India (UOI) and Others, before the Bombay High Court and vide judgment dated 17-2-2011, it was held as under:
"8. The Petitioner admittedly is a LTU and operating its accounts since 2006 for which Petitioner has received the acceptance of the Respondent. It is not disputed by the Petitioner that the Petitioner did not mention the name and the details of three new units which started operating after the submission of the consent letters for its other units. The action of the Chief Commissioner of LTU may appear correct in holding that these three (units at Nasik, Kanchipuram and Singur do not form a part of LTU for want of consent letter from the Petitioner and the acceptance to these three units to operate as a part of LTU; however, the fact of some transactions of all the units and intimation to LTU by the Petitioner cannot be over looked but has vital bearing over the issue. For instance earlier the Petitioner has requested the transfer of the credit from Kanchipuram to other units. So also sought permission of LTU, New Delhi for clearing vehicles containing scrap from Nasik unit. By letter dated 27-3-2009 the Petitioner informed the Superintendent of Central Excise, LTU, New Delhi that they were transferring Rs. 1 lac and Rs. 20 Lacs between these two industries from Sharda Motor Nasik Industrial Plot No. 112, MIDC to their other plant at plot No. 51 at Nasik which was behind CEAT company, Satpur, Nasik Industrial Estate by two letters dated 27-2-2009. The Petitioner filed letter with the LTU furnishing a copy of original consent with the list of units registered with the Central Excise Authorities. The Petitioner received letter from LTU on 11-9-2009 accepting the undertaking inform No. UT-1 in respect of Nasik Units in relation to the exports. Further the Petitioner has intimated LTU authorities, New Delhi about the transfer of education cess and SHE cess from Nasik plot No. 112 unit to Nasik plot No. 51 unit. It has also addressed to LTU authorities intimating about the transfer of Cenvat credit from Nasik Plot No. 51 unit. A letter was sent by the Dy. Commissioner of LTU, New Delhi dated 11-9-2009 is addressed to the Petitioner unit at Survey No. 52/1 behind CEAT company, Nasik Unit informing that the letter of undertaking furnished by the unit in terms of notification for covering clearance of export has been accepted by the Dy. Commissioner of Central Excise and Service Tax LTU, New Delhi.
Thus, the Petitioner has intimated about the new units and the acceptance letter by the Respondent in respect of Nasik unit puts the Petitioner on a stronger footing. Once the Respondent has accepted such communication and transaction of new units then the department cannot somersault and say that the revenue department was not aware of functioning of three new units of the Petitioner, who is enjoying the facility of LTU for other units. It is made amply clear that the Petitioner should have sent a separate consent letter of intimation about functioning of three units and should have obtained additional acceptance for these three new units to form a part of LTU. However/this is not an illegality so as to refuse the facility of LTU to the Petitioners for new three units. Opening of three units appears to be a continuous process of the development of the business of the Petitioner and LTU facility is made available in India as referred in the speech of the Finance Minister in the year 2005 as a benevolent scheme. Therefore, though there is a procedural flaw on the part of the Petitioners this irregularity is curable in the interest of the scheme and to refuse the benefit of the scheme to the Petitioner is a hyper technical approach. We are of the opinion that the action of the Chief Commissioner to refuse to accept new units as a part of LTU and issuing show cause notice to them regarding transfer of Cenvat credit is not tenable under the scheme.
Thus, in the present case, though the initial consent letter given by the Petitioner related only to the six units, both the Petitioner and the revenue since inception have proceeded on the footing that the Petitioner had opted for the LTU facility not only for the six units but also in respect of all the other units set up subsequent to the initial consent letter. This is evident from the fact that since inception the Petitioner has been filing ER-1 returns in respect of all the units (including the subsequently set up unit at Nashik) before the LTU at Delhi and even the LTU Delhi has treated that all the units of the Petitioner are governed by the LTU at Delhi and in fact permitted clearances for exports from the subsequently set up unit at Nashik. It is not in dispute that the local excise authorities apart from registering the new unit at Nashik have not administered the said unit on the footing that the unit was always administered by the LTU Delhi. It is only when the C.B.E. & C. opined that specific consent/acceptance letter is necessary, show cause notice has been issued to the Petitioner to deny the benefit of LTU to the unit set up after submitting the initial consent letter. It is not the case of the revenue that the subsequently set up units are not eligible to be administered by the LTU. The only grievance is that specific letter of consent has not been submitted in respect of the newly established units till 9-9-2010. In our opinion, the lapse, if any, being only technical and the LTU policy itself provides that the Chief Commissioner/Commissioner, LTU must play a pro active role in the administration of LTU and requires them to solve the problem that arises at the initial stage, in the facts of the present case all the units must be held to be governed by the LTU scheme since inception."
The aforesaid decision insofar as it relates to Nasik Unit would foreclose the issue before this High Court, though an appeal filed by the revenue is pending before the Supreme Court.
We have gone through the reasoning mentioned by the Bombay High Court. It was not disputed before the Tribunal that the facts mentioned in para 8 of the decision dated 17-2-2011 in Sharda Motor Industries Ltd. (supra) decided by the Bombay High Court would be equally applicable to the facts of the present case insofar as the Kanchipuram unit is concerned. No contrary contention, it is apparent, was raised before the Tribunal, which has merely followed the decision of the Bombay High Court in Sharda Motor Industries Ltd. (supra). In view of the aforesaid position, the present appeal does not have merit and has to be dismissed. Ordered accordingly. No costs.