Modvat credit after merger depends on continuity of manufacture and accepted declarations, not a fresh excise licence.

Modvat credit remained available after merger where the manufacturing unit continued at the same location, using the same inputs to make the same goods, and the only change was legal ownership. The existing declaration was treated as sufficient for Modvat purposes because the department had continued to approve classification and price lists and assess RT-12 returns without objection on the licensing point. No separate excise licence was required on these facts, so the respondents were entitled to Modvat credit and the Revenue's challenge failed.

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Issues: Whether the respondents were entitled to Modvat credit after merger of the original company with the respondent company, despite not obtaining a separate excise licence.

Analysis: The manufacturing unit continued at the same location, with the same goods being manufactured from the same inputs after the merger. The only change was in legal ownership. The departmental authorities had continued to approve the classification lists and price lists and had assessed the monthly RT 12 returns without objection on the licensing aspect. In these circumstances, the existing declaration was treated as sufficient for Modvat purposes, and no different treatment was warranted merely because of the merger.

Conclusion: The respondents were held entitled to Modvat credit, and the Revenue's appeal failed.

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