Credit transfer on amalgamation upheld where stock discrepancy could not defeat the statutory entitlement.

Credit transfer on amalgamation was permitted under Rule 57F(7), later Rule 57F(20), of the Central Excise Rules, 1944. The Tribunal rejected the Revenue's objection that the transfer should fail because the physical stock of inputs, work-in-progress and finished goods did not the credit balance in the books. Treating the issue as no longer res integra, it followed its earlier view and noted that Board Circular No. 1/93 dated 5-1-1993 applied only to the period before Rule 57F(20) came into force on 1-3-1997. The assessee was therefore entitled to the credit transfer and denial on the stated ground was not sustainable.

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Issues: Whether credit could be transferred on amalgamation of one unit with another under Rule 57F(7), now Rule 57F(20), of the Central Excise Rules, 1944, despite the Revenue's objection based on the quantum of physical stock on the date of transfer.

Analysis: The transfer of credit on amalgamation was held to be governed by the relevant rule permitting such transfer. The denial was based on the alleged insufficiency of physical stock of inputs, work-in-progress and finished goods to match the credit balance in the books. The issue was treated as no longer res integra and the Tribunal followed its earlier view, noting that the Board's Circular No. 1/93 dated 5-1-1993 applied to the period prior to the introduction of Rule 57F(20) with effect from 1-3-1997.

Conclusion: The transfer of credit could not be denied on the ground taken by the Revenue, and the assessee was entitled to the credit transfer.

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