2008 (7) TMI 318 - AT - Central Excise

Deemed credit on processed fabrics date - As per orders of the HC, Fabric processing unit got amalgamated to Grey fabric unit what is the relevant date when amalgamation became effective cessation of corporate entity of the Transferor Company would occur not on the Transfer date but on the effective date hence held that, deemed credit is available with effect from the effective date i.e, when the certified copy of the amalgamation approved by HC revenue s appeal rejected

Summary

Issues Involved:
- Effective date of amalgamation for excise duty purposes

Analysis:
The case involved an appeal by the Department against the order of the Commissioner regarding the effective date of amalgamation for excise duty purposes. The facts revealed that M/s. Nahar Industrial Enterprises Ltd. amalgamated with M/s. Oswal Cotton Mills Ltd., resulting in the conversion of the grey fabric unit and fabric processing unit into one unit. The Department issued a show cause notice proposing to recover a sum representing the deemed credit availed in respect of processed fabric. The Commissioner held that the amalgamation took effect only from the date when the certified copy of the amalgamation was filed with the Registrar of Companies. The Department argued that the effective date of amalgamation was from the date approved by the High Court. The Tribunal noted that the deed of amalgamation specified a different effective date from the date of approval by the High Court. Referring to a precedent, the Tribunal emphasized that the eligibility for benefits under the notification would survive up to the effective date of amalgamation. The Tribunal found no extra benefit sought by the respondents by claiming a different effective date and rejected the appeal by the Department.

In conclusion, the Tribunal upheld the Commissioner's decision regarding the effective date of amalgamation for excise duty purposes, emphasizing the importance of the effective date specified in the deed of amalgamation. The Tribunal found no infirmity with the Commissioner's order and rejected the Department's appeal.