Retrospective amalgamation does not defeat valid Cenvat credit on duly paid service tax for royalty charges.

Cenvat credit of service tax paid on royalty charges remained admissible because the credit was taken when the brand owner and the appellant were separate legal entities and the tax had been duly paid on the taxable service. A later amalgamation sanctioned with retrospective effect did not alter the legal character of the service, render the invoice infructuous, or retrospectively invalidate credit validly availed under the Cenvat Credit Rules, 2004. The denial was therefore unsustainable, and the assessee succeeded.

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Issues: Whether Cenvat credit of service tax paid on royalty charges was admissible when the brand owner and the appellant were later amalgamated with retrospective effect, and whether such later amalgamation rendered the tax-paid invoice infructuous.

Analysis: The credit was taken when the appellant and the brand owner were separate legal entities and service tax had been duly paid on the taxable service. The later judicial order approving amalgamation from an appointed date did not alter the legal character of the service tax paid during the relevant period or make the invoice infructuous. The credit claim was otherwise not disputed on merits, and a subsequent development in company law could not retrospectively invalidate a validly availed credit under the Cenvat Credit Rules, 2004.

Conclusion: The credit was admissible and the denial was unsustainable; the issue is decided in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal succeeded because the retrospective amalgamation did not defeat the appellant's entitlement to the credit already taken on duly paid service tax.

Ratio Decidendi: A later amalgamation with retrospective effect does not by itself invalidate Cenvat credit validly availed on service tax paid during the period when the parties existed as separate legal entities.

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