TMI Blog2015 (11) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... particular quantity in the available space, this reason is sufficient to hold that the nature of goods in the present case is such that the same can not be stored more than a particular quantity of stock. - Expansion of factory is not every time possible due to various factors like availability of finance to buy the extra land and building, availability of land and building for purchase etc. particularly adjacent to existing factory premises. Therefore the decision of expansion of the factory is the sole discretion of the assessee and department can not insist for that. For consideration of the Assessee’s request for permission under Rule 4(4), the existing circumstances has to be seen. Appellant successfully demonstrated that over and above present quantity being stored, cannot create extra space for storage likewise there are more number of differences in the facts of the M/s. GKN Sinter Metals Pvt. Ltd case and facts of the present case therefore ratio of the M/s. GKN Sinter Metals Pvt. Ltd case is not applicable and therefore same is distinguished. Keeping in view the safeguard of Revenue, I observed that in the previous period when the Ld. Commissioner granted permission i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri. Harish Bindumadhavan, Ld. Counsel for the appellant submits that Ld. Commissioner rejected the extension of their permission for storage of finished goods outside the factory premises without payment of duty in terms of Rule 4(4) of Central Excise Rules, 2002 with a view that the reason given by the appellant did not constitute that there is exceptional circumstances. He submits that in the said rules even as per the Ld. Commissioner, exceptional circumstances have to arise with regard to (a) nature of goods (b) shortage of storage space. In the present case even earlier also Ld. Commissioner was granting the permission considering shortage of space as an exceptional circumstances therefore in the present case when same set of facts are on record and there is no change in the circumstances it is not correct on the part of the Ld. Commissioner to hold that appellant has not made out case of exceptional circumstances. He submits that their product is capital goods used in Oil, Chemical Petrochemical refineries which are used inside the tubular high rise distillation structure in refineries and constitute the principle technology that technology facilitates separation proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cleared to the customer. Moreover, the storage is allowed by the Ld. Commissioner only against execution of bond and bank guarantee by which the revenue is absolutely safeguarded therefore there is no loss to the revenue in granting permission but if permission is not granted it will cause severe loss to the company as well as to the Revenue as less production and supply will reduce the payment of duty also. He placed reliance on the following judgments. (a) Balkrishna Industries Ltd. Vs. Commissioner of C. Ex. Jaipur-1[2013(297) ELT 257(Tri-Del)] (b) M/s. Laben laboratories Pvt. Ltd. Vs. CCE, Nagpur [2015-VIL-241-CESTAT-MUM-CE] In view of the above judgments, wherein facts are absolutely identical to the present case therefore application for extension of permission for storage the goods outside the factory should be allowed. 4. Shri. V.K. Agarwal, Addl. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that since the appellant is seeking permission continuously for long period therefore facility of storage of the goods without payment of duty cannot be extended to the appellant . He submits that ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place, where they are produced or manufactured, or from a warehouse, unless otherwise provided : (1A) Notwithstanding anything contained in sub-rule (1), every person who gets the goods, falling under Chapter 61 or 62 or 63 of the First Schedule to the Tariff Act, produced or manufactured on his account on job work, shall pay the duty leviable on such goods, at such time and in such manner as is provided under these rules, as if such goods have been manufactured by such person : Provided that where any person had, instead of paying duty, authorized job worker to pay the duty leviable on goods manufactured in his behalf under the provisions of sub-rule (1A) as it stood prior to the publication of this notification, he shall be allowed to obtain registration and comply with the provisions of these rules within a period of thirty days from the date of publication of this notification in the Official Gazette.]. (2) Notwithstanding anything contained in sub-rule (1), where molasses are produced in a khandsari sugar factory, the person who procures such molasses, whether directly from such factory or otherwise, for use in the manufacture of any commodity, whether or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r storage of the goods and no extra space left for the storage of increased manufactured goods. The Ld. Commissioners contention that the Appellant could not show that they are making efforts to expand the space to avoid the storage of goods outside, is not found satisfactory for the reason that when the Appellant has made optimum use of space available in the factory and therefore due to shortage of space, they require to store the goods outside the factory premises, the department has no locus standi to insist the assessee for the expansion of the space. If this contention is accepted then it applies to each and every industry and the provision of Rule 4(4) will become redundant. Expansion of factory is not every time possible due to various factors like availability of finance to buy the extra land and building, availability of land and building for purchase etc. particularly adjacent to existing factory premises. Therefore the decision of expansion of the factory is the sole discretion of the assessee and department can not insist for that. For consideration of the Assessee s request for permission under Rule 4(4), the existing circumstances has to be seen. It is fact on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd the duty becomes payable only at the time of removal of the goods. Therefore, the Revenues plea that there is deferment of collection of duty in cases of outside storage of the goods under Rule 4(4) without payment of duty, is not correct. 6. On going through the impugned order, I find that nowhere in the order, the reasons given by the appellant in their letter dated 7-8-2010 compelling them to store the tyres outside the factory have been discussed. The permission for storage outside the factory premises has been denied only on the ground that this permission can be granted only under exceptional circumstances and such exceptional circumstances cannot be sort of perpetual and cannot continue beyond a reasonable period and the same amounts to enjoying warehousing facility under Rule 20 for which no permission has been granted. As discussed above, the grounds on which this permission has been denied are not correct. So long as the exceptional circumstances caused on account of nature of the goods or shortage of storage space continue, the permission under Rule 4(4) has to be given for onside storage of the goods without payment of duty after prescribing the condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts in the case of Balkrishna Industries Ltd. (supra) this Tribunal was considering the provisions of Rule 4(4) of the Central Excise Rules, 2002 and held as under:- 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) of Central Excise Rules, 2002, the duty becomes payable only at the time of removal of the goods from the factory. This rule, however, also provides that the goods can be removed from the factory without payment of duty to a warehouse under Rule 20 of the Central Excise Rules and that in that case the duty would be payable at the time of removal of the goods from the bonded warehouse. However, sub-rule (4) of Rule 4 prescribes that the Commissioner in exceptional circumstances having regard to the nature of the goods and shortage of storage at the premises of the manufacture where the goods are made, permit a manufacturer to store his goods at any other place outside the factory premises without payment of duty, subject to such conditions as he may specify. In this regard, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 2002, for denying the permission. Moreover outside storage under Rule 4(4) under the circumstance of exceptional nature having regard to the nature of the goods and shortage of storage space in the factory, is different from the warehousing facility under Rule 20. The outside storage place under sub-rule (4) of Rule 4, as clarified in the Boards Circular dated 1-5-1996, is an extension of the factory premises while the bonded warehousing under Rule 20 is not an extension of factory premises and for that purpose, separate registration has to be obtained. The Revenues plea that outside storage of non-duty paid goods under Rule 4(4) means deferment in duty collection for which there is no provision under Central Excise Law except under the warehousing provisions of R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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