TMI Blog2011 (11) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... for safeguarding the interest of the Revenue - Matter remanded back - Decided in favour of applicant. - E/3916/2010-SM(BR) - Final Order No. 835/2011-SM(BR)(PB) - Dated:- 18-11-2011 - Shri Rakesh Kumar, Member (T) Shri Prakash Shah, Advocate, for the Appellant. Shri Fateh Singh, DR, for the Respondent. ORDER The appellant are manufacturers of Automobile tyres of rubber chargeable to central excise duty under sub-heading No. 4011 of the Central Excise Tariff. Their first plant for manufacture of tyre was started at Bhiwadi in the year 2002 and subsequently, their second plant was started at RICO Industrial Area, Chopanki, Alwar. In July, 2005, the appellant applied to the jurisdictional Central Excise Commissioner for outside storage of the finished goods manufactured by them under Rule 4(4) of the Central Excise Rules, 1944 on the following grounds : (a) While initial production capacity of their plant at Bhiwadi was 25 MT/per day, the same has increased to 100 MT/per day and substantial extension required addition of not only the manufacturing facilities like machines for tyre manufacture and tyre curing machines but the related utilities also viz. Boilers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Commissioner of Central Excise in the event of loss due to any reason. (d) Storage space/premises is safe and secure and for this purpose, security cameras must be provided. (e) The appellant must maintain two stock registers (RG-I) - one at the factory and another at storage place. (f) Movement of goods from the factory to storage place is made under the prescribed challans which are pre-authenticated by the authorized signatory before bringing into use. (g) Serial numbers of challan must be intimated to the jurisdictional Dy. Commissioner and Assistant Commissioner and Range Superintendent in advance. 1.2 There is no dispute that the conditions and safeguards prescribed by the Commissioner for outside storage are followed by the appellant. Subsequently, the appellant applied for extension of this facility from time to time, which was granted till September, 2010. In the meantime, the appellant s second plant at Chopanki also started production and similar permission for outside storage at the same premises was granted in respect of the tyres manufactured in Chopanki Plant also. 1.3 In August, 2010, the appellant again requested the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, that the Commissioner s interpretation of the words exceptional circumstance in Rule 4(4) is not correct, that in terms of the provisions of Rule 4(4), exceptional circumstance have to be determined with reference to nature of the goods and shortage of space for storage of goods at the premises of the manufacturer, that so long as exceptional circumstances on account of nature of the goods or shortage of the storage space at the factory where the goods are manufactured continue, this permission has to be granted, that as is clear from the figures of the production given in the appeal memo, while in Bhiwadi Plant the production has increased from 14526 M.T. in 2003-04 to 32036 in 2009-10, in Chopanki Plant, the production has increased from 1659 M.T. in 2006-2007 to 28177 M.T. in 2009-10, that enhancement of the production capacity results in more space being occupied by the production machinery and other ancillary facilities, leaving less space for storage, that in addition to this, on account of nature of demand for their product and also export commitments, the appellant are required to store huge quantity of tyres for which they do not have the storage facility at their p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory premises, that the facility outside storage being enjoyed by the appellant for the last 5 years amounts to permitting warehousing facility under Rule 20 without the place being notified as warehousing station and without the permission in this regard having been granted, that even if the permission for outside storage is used by the appellant mainly in respect of the clearances for export, it amounts to enjoying warehousing facility under Rule 20 without any permission and without following the prescribed procedure in this regard in the Board s Circular No. 581/18/2001-CX.6, dated 29-6-2001 issued under Rule 20(1) of the Central Excise Rules, 2001, that in respect of the goods cleared from outside storage premises for home consumption, the department loses the interest which would be chargeable if the outside storage was under the warehousing provisions of Rule 20 and that in view of this, there is no infirmity in the impugned order. 5. I have carefully considered the submissions from both the sides and perused the records. The goods produced and manufactured in a factory can be kept within the factory without payment of duty, as in terms of the provisions of Rule 4(1) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances which compel them to store the goods outside the factory premises. In my view, if these circumstances still exist as a result of which the appellant have no option but to store the goods outside the factory premises, the permission for outside storage has to be granted subject to the conditions as are necessary for safeguarding the interest of the Revenue. The permission under sub-rule cannot be refused just because an assessee has been enjoying the same continuously for certain number of years. 5. The Revenue s plea is that such outside storage facility under sub-rule (4) of Rule 4 continuously for several years amounts to enjoying the warehousing facility under Rule 20 of the Central Excise Rules. However, I find that this ground has not been taken in the show cause notice, as the show cause notice has been issued on the basis that the permission under Rule 4(4) can be granted only under the exceptional circumstances and the said circumstances cannot be sort of perpetual and cannot continue beyond reasonable period. In view of this, at the adjudication stage, the Commissioner cannot travel beyond the show cause notice and invoke Rule 20 of the Central Excise Rules, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
