merging of two business entity

[Ramesh Patel]

What is criteria for merging two business entity in excise. Under which rule this can be referred.

[Rama Krishana]

In excise two issues are to be addressed before merging of two units (1) Duty of finished goods lying in stock at the time of merger (2) Treatment of unutilized cenvat credit. To the extent first question is there, if the goods remains withing the factory of production, excise duty is not payable since even after merger, the owner would remain same. But, regarding cenvat credit, you need to follow rule 10 of the CCR, 2004.

AI Summary

Cenvat credit treatment governs unutilised credits on merger; duty on in factory stock not leviable if ownership unchanged. Merging two business entities in excise raises duty on finished goods in stock and treatment of unutilised cenvat credit. If finished goods remain within the factory and ownership remains unchanged after merger, excise duty on those stocks is not payable. Unutilised cenvat credit must be addressed by applying the rules governing transfer or adjustment of credit on amalgamation under the cenvat credit regulatory framework.