Cenvat credit on merger-transferred stock upheld where intimation was given and Revenue produced no contrary evidence.

Cenvat credit already accrued before a merger could not be denied merely because the stock of inputs was taken over by the successor company. The first appellate authority's reasoned order was upheld because it recorded that intimation had been given regarding the stock and that the stock was eligible for credit. In the absence of any contrary legal or factual material from the Revenue, there was no basis to disturb those findings. The Tribunal also noted that a merger carries existing assets and liabilities, and the Revenue's objection under Rule 8(2) of the Cenvat Credit Rules, 2002 did not succeed on the record.

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Issues: Whether the respondent was entitled to retain the benefit of Cenvat credit in respect of stock transferred on merger, and whether the Revenue had shown any legal or factual basis to upset the first appellate authority's order.

Analysis: The only substantive controversy was whether credit already accrued before merger could be denied merely because the stock was taken over by a newly formed company. The Tribunal noted that the first appellate authority had passed a reasoned and speaking order recording that intimation had been given regarding the stock of inputs and that such stock entitled the respondent to Cenvat credit. In the absence of any contrary evidence brought by the Revenue to displace those findings, there was no basis to interfere. Reliance was placed on the principle that a merger carries with it the existing assets and liabilities, and the Revenue's objection under Rule 8(2) of the Cenvat Credit Rules, 2002 did not succeed on the record.

Conclusion: The respondent was entitled to the credit, and the Revenue's challenge failed.

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