ORDER
T.P. Nambiar, Member (J)
1. The following questions are ned by the department for reference to the High Court :-
(i) Whether, the Tribunal is legal and correct in allowing the benefit of transfer of credit from one registered factory to another. In the absence of any legal provision prior to Notification No. 34/95-C.E. (N.T.) dated 16-8-1995 [inserted Rule 57F(7)], when there was no provision for transfer of unutilised credit in case of change in ownership resulting from merger, amalgamation/transfer etc. Whether, Tribunal could extend the benefit, when the existing legal provisions did not envisage so. Would that not tantamount to substitution of provisions which was not intended / not in existence at the material time.
(ii) Whether, the Tribunal is correct in holding that there could be no bar for utilising the credit for the reason of the change of the management. Modvat utilisation is in respect of factory, owned by an assessee. An assessee may be an individual proprietor partnership concern or a company. If the argument/logic of the Tribunal were to be accepted, there could be no bar for transfer of credit from individual owned unit to partnership concern and further to a Limited Company/Public Company. That would infringe legal provisions, as Rule 57G mentions the term “manufacturer”. Hence, credit availment is to be linked to the manufacturer-factory and not factory alone. Viewed against this legal requirement, whether the order of Tribunal would be legally sustainable.
2. The Ld. SDR pointed out that since there was a change in the ownership of the company, the company which came into existence at a later point of time cannot take the Modvat credit on the inputs as was done by the earlier company. He therefore pointed out that the above questions have arisen out of the order of the Tribunal.
3. He also stated that an amendment has come to the effect only on 16-8-1995. In the amendment it was mentioned that even a company which takes place of the previous company can avail the Modvat credit.
4. Th Ld. advocate Shri M.S. Krishnan appearing for the respondent contended before us that from the amendment itself is only a clarification nature. He pointed out that the Modvat benefit is a beneficient piece of legislation and the company which came into existence merely takes the credit on the inputs as well as on the finished products which are already declared by the previous company their ownership is not very important for taking the Modvat benefit. He pointed out that the provisions are very clear and it cannot be said that a point of law has arisen.
5. We have considered the submissions. We have clearly held in the order that the facility of Modvat has to be read in the context of receipt of certain inputs in a factory and the utilisation thereof. We have also held that even there is a change of management so long as the operations carried out in the factory are relatable to the events before its takeover, the goods manufactured and inputs brought in are the same the eligibility which had already been determined continues. It is therefore clear that when the inputs as well as the finished products are the same which were before taking over of the company, the question of denial of the Modvat credit on the face of it is not warranted. That being the case, it cannot be said that a question of law has arisen in this regard. Accordingly, we reject the reference application.