Central excise credit transfer rule did not apply where adjoining unit registrations merged without ownership or site change.

Rule 57F(7) of the Central Excise Rules, 1944 applied only where unutilised credit was transferred because of a change in ownership or a change in the site of the factory, with permission serving to ensure only correctly availed credit was shifted. Where the manufacturer remained the same, ownership did not change, the factory site stayed unchanged, and only the registration certificates of adjoining units were merged, the rule's triggering conditions were not met. On that basis, denial of the transferred credit was unjustified and the assessee's appeal succeeded.

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Issues: Whether Rule 57F(7) of the Central Excise Rules, 1944 applied to transfer of credit when only the registration certificates of two adjoining units were merged, without any change in ownership or in the site of the factory.

Analysis: The rule was intended to operate where unutilised credit was sought to be transferred on account of change in ownership or change in the site of a factory, and the Commissioner's permission was meant to ensure that only correctly availed credit was shifted in those situations. Here, the manufacturer remained the same, there was no change in ownership, and there was no change in the site of the factory. The only development was consolidation of registration, so the factual situation did not satisfy the conditions that trigger the rule.

Conclusion: Rule 57F(7) did not apply, and denial of the transferred credit was not justified; the appeal succeeded in favour of the assessee.

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