TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether the successor private limited company, which took over the assets and liabilities of the dissolved partnership firm as a going concern, was entitled to transfer the unutilised Modvat credit balance lying in RG 23A Part II of the old unit.
Analysis: Modvat credit under Rule 57A of the Central Excise Rules, 1944 is intended for use in relation to manufacture of the final products, and Rule 57F governs utilisation of such credit. The factual position showed that the successor company had taken over the factory, assets, liabilities, inputs and finished goods of the erstwhile firm, and there was no allegation that the relevant inputs or finished products were absent or had not been taken over. In such circumstances, the dissolution of the partnership did not alter the character of the inputs or the final products, and the change in legal form of the unit did not by itself justify denial of the credit. The earlier decision relied upon, dealing with similar takeover of a business as a going concern, supported the view that technical objections should not defeat the substantive entitlement to credit.
Conclusion: The successor company was entitled to transfer the balance of Modvat credit lying in RG 23A Part II of the erstwhile partnership firm.
Final Conclusion: The appeal was allowed and the assessee's entitlement to carry forward the unutilised Modvat credit was upheld, with consequential relief.
Ratio Decidendi: Where a successor entity takes over a manufacturing unit as a going concern along with its assets, liabilities, inputs and finished goods, the unutilised Modvat credit attributable to the erstwhile unit cannot be denied merely because the business has changed its legal form.
TaxTMI 
TaxTMI 
