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2013 (9) TMI 215 - HC - Central ExciseCENVAT Credit – Storage of Inputs outside the factory premises - Applicability of Rule 57 (A) (B) (1) – Whether the duty having been paid on the inputs stored outside the factory premises which was received in the factory, the tribunal was not justified in not considering Rule 57 (A) (B) (1) for the purposes of CENVAT credit - Whether the principle of law i.e.,the applicability of Rule 57 (A) (B) (1) being absolutely the same - Whether the tribunal was not justified in holding that prior permission of the Commissioner was required for storing the inputs outside the factory premises when the circular not put such condition - Denial of CENVAT credit only on the procedural ground of lack of permission from the Commissioner without merits - Held that:- Held that:- Non-observance of procedural condition could not be a ground to deny the credit when there was no dispute regarding duty payment and the use of goods in manufacture of final products - MANGALORE CHEMICALS & FERTILIZERS LTD. Versus DEPUTY COMMISSIONER [1991 (8) TMI 83 - SUPREME COURT OF INDIA ] - unnecessary technicalities, which were matter of form and not one of the substance would not justify the level of permission - The CBEC circular was issued on the representations for availing MODVAT credit on material, which was not received directly inside the manufacturer’s premise and which was required to be stored outside the factory premise and subsequently to the manufacturer's factory. The requirement under CBEC Circular was by way of relaxation to the mandatory provisions of storing the modvatable inputs inside the factory premises, which was the requirement of Rule 57AB (1) (d) - Any relaxation from the mandatory compliance of the Rules must be construed strictly - The CBEC relaxed the mandatory condition of storing the modvatable inputs outside the factory on specific grounds namely on account of shortage of storage space, hazardous nature of inputs or the like - The reasons for storage of modvatable inputs outside the factory could be many and thus the discretion of storing such goods outside factory premise was left to the Jurisdictional Commissioner, Central Excise, with a further condition that credit in such case will be taken in the books of accounts only when the entire inputs covered by invoice were received inside the factory for being put to use in production. The required permission was not taken from the Jurisdictional Commissioner of Central Excise - The CESTAT observed that admittedly the credit was taken while the inputs were still lying outside the factory unauthorisedly despite undertaking given by the assessee in their letter submitted to the Deputy Commissioner of Central Excise that they will take credit only when the total consignment covered under single invoice was received in the factory - Having failed to take the permission of the Jurisdictional Commissioner of Central Excise for relaxation to store the inputs from the Jurisdictional Commissioner of Central Excise and further availing the credit against its own undertaking given by the party in its letter - the appellant was not entitled to the input credit - There was no such statement of fact in the show cause notice, in the order of the order-in-original or the appellate authority that the inputs under single invoice were brought in the factory premises and were used in the manufacturing process before the credit was taken in the books of account. There was no error committed by the CESTAT in recording finding that the Commissioner (Appeals) had erred in law in allowing the credit to the assessee after holding that the appellant had not observed the procedure prescribed for relaxation to store inputs outside the factory premises - Decided in favour of revenue and against the party-appellant.
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