Modvat credit after amalgamation cannot be denied where the original declaration existed and manufacturing continued as a going concern.

After amalgamation of a manufacturing unit, Modvat credit could not be denied merely because no fresh declaration was filed under Rule 57G or because transfer of credit was not separately obtained. The original declaration had already been filed by the manufacturer, and the amalgamated unit continued the same manufacturing activity as a going concern without interruption. On that factual basis, the existing declaration was treated as substantially satisfying the rule requirement, and continuity of business supported transfer of credit. The demand for a fresh declaration and refusal to permit credit transfer were therefore not prima facie sustainable, and interim relief against recovery and pre-deposit was granted to the assessee.

---

---

Issues: Whether, after amalgamation of a manufacturing unit with another company, Modvat credit could be denied for want of a fresh declaration and for failure to obtain transfer of credit.

Analysis: The manufacturer had already filed a declaration under Rule 57G of the Central Excise Rules before amalgamation. The unit continued as a going concern without interruption in production, and the amalgamation terms provided for transfer of rights and liabilities to the amalgamated company. In this factual setting, the requirement under Rule 57G was substantially satisfied by the existing declaration of the same manufacturing entity, and the continuity of business supported the prima facie view that neither a fresh declaration nor denial of transfer of credit was justified.

Conclusion: The demand for a fresh declaration and the refusal to permit transfer of Modvat credit were not prima facie sustainable, and relief against recovery and pre-deposit was granted in favour of the assessee.

Ratio Decidendi: Where the same manufacturing activity continues as a going concern after amalgamation and the original declaration was filed by the manufacturer, Modvat credit cannot be denied merely because no fresh declaration was filed post-amalgamation.

---