Modvat declaration after amalgamation treated as procedural; credit upheld and penalty rejected

After amalgamation of the manufacturing unit, a fresh Modvat declaration was not required where the manufacturing process, inputs and finished products remained unchanged and the department already had the relevant particulars from the earlier declaration. The filing of another declaration was treated as a procedural formality, and obtaining a fresh excise licence after amalgamation did not alter that position. Credit was therefore validly taken, and the penalty for absence of a fresh declaration was not sustainable.

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Issues: Whether, after amalgamation of the manufacturing unit, a fresh Modvat declaration was required before credit could be taken and whether penalty was imposable for want of such declaration.

Analysis: The manufacturing process, inputs and finished products remained the same, and the department was already aware of the relevant particulars through the earlier declaration. In that situation, the requirement of filing another declaration was treated as a procedural formality. The issue was not affected by the fact that a fresh excise licence had been obtained after amalgamation.

Conclusion: A fresh declaration was not required, credit was validly taken, and the penalty was not sustainable.

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