Cenvat credit after amalgamation remains available for pre-merger liabilities, and suppression-based penalty cannot stand without a factual finding.

Cenvat credit on duty-paid goods could not be denied merely because the supplementary invoice was issued after amalgamation, where the underlying liability related to the pre-merger period and the merger did not extinguish the transferor's rights and liabilities. The transferee company could claim the accrued entitlement despite the invoice referring to the erstwhile name of the merged entity. A demand for reversal of credit, penalty and interest also could not be sustained where no finding of suppression of facts was recorded and the duty had been paid before the show cause notice. The impugned order was set aside and consequential relief followed.

---

---

Issues: (i) Whether Cenvat credit could be denied on the ground that the duty was paid under a supplementary invoice issued after amalgamation of the recipient company. (ii) Whether the demand of reversal of credit, penalty and interest could be sustained on the basis of alleged suppression of facts and the invocation of Rule 9 of the CENVAT Credit Rules.

Issue (i): Whether Cenvat credit could be denied on the ground that the duty was paid under a supplementary invoice issued after amalgamation of the recipient company.

Analysis: The liability related to a period prior to the merger, and the duty was discharged towards that pre-merger liability. The merger did not extinguish the rights and liabilities of the transferor company. The transferee company acquired the rights of the transferor company as well, and the entitlement to take credit on duty-paid goods could not be defeated merely because the supplementary invoice mentioned the erstwhile name of the merged entity.

Conclusion: Cenvat credit was admissible, and the denial of credit was unjustified.

Issue (ii): Whether the demand of reversal of credit, penalty and interest could be sustained on the basis of alleged suppression of facts and the invocation of Rule 9 of the CENVAT Credit Rules.

Analysis: The earlier order confirming duty did not record a finding of suppression of facts, and the duty had been paid before the show cause notice. In these circumstances, the foundation for treating the credit as irregular on the ground of suppression was absent, and the consequential levy of penalty and interest could not stand.

Conclusion: The demand for reversal of credit, along with penalty and interest, was not sustainable.

Final Conclusion: The impugned order was set aside and the appeal succeeded with consequential relief.

Ratio Decidendi: A merger does not extinguish the accrued rights and liabilities relating to pre-merger transactions, and Cenvat credit cannot be denied merely because duty on such transactions is paid under a supplementary invoice after amalgamation, in the absence of a valid finding of suppression.

---