ORDER
1. M/s. PLR Industries Ltd. were engaged in the manufacture of excisable goods and were availing of the benefit of Modvat Credit on capital goods and inputs. All their assets and liabilities were taken over by M/s. PLR Textiles Ltd., under the High Court’s amalgamation order dated 29-4-1998 with effect from 1-7-1997. At the time of such transfer of assets and liabilities, M/s. PLR Industries Ltd had capital goods credit of Rs. 15,57,541/- and input credit of Rs. 34,354/- in their respective accounts (RG 23C Part II and RG 23A Part II). The question arose whether these credits could be availed by M/s. PLR Textiles Ltd (the appellants herein), without permission under Rule 57F(20) and 57S(5) of the Central Excise Rules, 1944 from the jurisdictional Assistant Commissioner of Central Excise. This question was answered in the negative by both the lower authorities. Hence this appeal.
2. Learned Consultant for the appellants submits that it was open to the appellants to avail the above credits inasmuch as Central Excise Registration of M/s. PLR Industries Ltd was made over to the name of PLR Textiles Ltd and the right to avail Modvat Credit was part of the assets transferred to the latter under the High Court’s amalgamation order. The Consultant further argues that non-obtaining of prior permission of the Assistant Commissioner in terms of Rule 57F(20) and 57S(5) is, at best, a minor procedural lapse and the same cannot be cited by the Revenue to defeat the appellants’ substantive right to avail Modvat credit.
3. The learned JDR submits that the requirement, under the above rules, of obtaining the Assistant Commissioner’s permission was a substantive pre-condition for transfer of Modvat credits. He points out that, in the present CENVAT Rules also, analogous provision exists.
4. After considering the submissions, we find that admittedly the assessee did not apply to the Assistant Commissioner under Rule 57F(20) and 57S(5) for transfer of the credits in question to their own account from that of M/s. PLR Industries Ltd. Under these Rules, transfer of ownership through amalgamation was one of the incidences for transfer of Modvat credits from the transferor to the transferee. We are unable to accept the learned Consultant’s argument that the non-fulfilment of the requirements of the above rules is a condonable lapse. There is no dispute of the fact that the appellants were eligible to apply for the Assistant Commissioner’s permission under the rules and that if such application has been made on the strength of the High Court’s amalgamation order, the transfer of the credits in question would have been allowed under the said Rules. We are told that the present CENVAT Rules contain analogous provisions. If that be so, the appellants should be given liberty, for the ends of justice to apply to the competent authority under the present provisions for transfer of credits in question to their own account. In this view of the matter, we set aside the orders of the lower authorities and allow this appeal to the extent of giving liberty to the appellants to apply to the proper officer of Central Excise, for transfer of the Modvat credits in question to their own Cenvat account. Any such application shall be disposed of by the proper officer in accordance with law after giving the appellants a reasonable opportunity of being heard.