Modvat credit cannot be reversed for a mere change in name when the Department was promptly informed.

Mere change in the company's name, promptly intimated to the Department, did not warrant reversal of Modvat credit on capital goods or imposition of penalty. The requirement of prior permission under Rule 57S(4) was treated as a procedural formality that could not defeat credit where there was no substantive change in the unit's identity or functioning. On that basis, denial of credit was held unsustainable and the penalty could not stand.

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Issues: Whether Modvat credit was liable to reversal, and penalty sustainable, where the manufacturer's name was changed and the Department was duly intimated.

Analysis: The appeal concerned denial of Modvat credit on capital goods and the consequential penalty, on the ground that prior permission was not obtained for transfer of credit after the company's name changed. The change was found to be only in nomenclature, with timely intimation to the Department. In these circumstances, the requirement of permission under Rule 57S(4) was treated as not warranting reversal of credit, and the credit denial was held unsustainable. The basis adopted was consistent with the view that such formal compliance, in the absence of any substantive change in the unit, is only a technical requirement.

Conclusion: The reversal of Modvat credit and the penalty were not justified and the appeal was allowed.

Final Conclusion: Mere change in the company's name, when promptly intimated to the Department, did not justify denial of Modvat credit or imposition of penalty.

Ratio Decidendi: A procedural requirement for permission does not justify reversal of credit or penalty where the change is only in the name of the unit and there is no substantive alteration in its identity or functioning.

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