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Hemavathy Sahakara Sakkare Karkhane Ltd. Versus C.C.E.,C. & S.T., Mysore

2015 (3) TMI 1152 - CESTAT BANGALORE

Cancellation of registration certificate - Interest demand - place of removal - duty ought to have been paid on 17-12-2007 i.e. the date on which Central Excise registration was granted to Sri Chamundeshwari Sugars Ltd.- whether the goods can be deemed to have been removed on the date on which the factory premises were handed to Sri Chamundeshwari Sugars Ltd? - Held that:- It cannot be said that there was deemed cancellation of registration certificate on 17-12-2007 and there was no deemed remov .....

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issued to the next person. In such cases invariably, the person who is surrendering the license or whose license is cancelled is required to pay all the arrears or pay duty on the goods. If they were to do so, the duty would have been collected on the date itself. Similarly if the appellants were to be aware of these provisions, they could have taken permission to store the goods elsewhere without payment of duty from the Commissioner explaining the peculiar circumstances and then also there co .....

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nforcement of the demand made by the Revenue. - Decided in favour of assessee - E/488/2009-SM - Final Order No. 20775/2015 - Dated:- 6-3-2015 - Shri B.S.V. Murthy, Member (T) Shri Anil Kumar, Advocate, for the Appellant. Shri A.K. Nigam, AR, for the Respondent. ORDER The factory and the machinery etc. were leased to M/s. Chamundeswari Sugars Ltd. on 17-12-2007. According to the lease agreement, the appellant was allowed to keep the sugar manufactured prior to the date of lease agreement, in the .....

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lty. The appellant is in appeal against this confirmation of demand for interest. 2. The learned counsel on behalf of the appellant submitted that Appellant had made payment of duty whenever they had cleared sugar from the store room and therefore the duty was paid in accordance with law. The goods manufactured by the applicant were very much available in the factory of manufacture itself as on 17-12-2008 till they were subsequently removed on different dates. The appellants not only paid d .....

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tration nor registration certificate was revoked by the proper authority. Similarly, the goods cannot be deemed to have been removed from the place of removal to attract levy of Central Excise duty. The circular cited above also specifically provides that registration once granted is permanent, unless it is cancelled or revoked. The appellant did not apply for cancellation of registration since the appellant was carrying on the activity. The registration certificate is both for manufacture as we .....

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ed by mistake. According to Circular No. 662/53/2002-CX., dated 17-9-2002, an officer granting registration has to carry out post facto verification within five days and cancel the registration if major discrepancies are found. This was not done in this case. No loss of revenue has occurred to the department and therefore interest cannot be demanded. According to the agreement with Shri Chamundeshwari Sugars Ltd., the appellant continues to have part of the premises where they had stored excisab .....

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t of the same premises, there can be two registration certificates. 3. The learned AR would submit that : There cannot be two registration certificates in respect of the same premises. Therefore if the appellant did not apply for cancellation of registration, it is deemed to have been deregistered. Once the same premises is issued with a registration certificate for another manufacturer, the day the premises or the factory was handed over by the appellant to Sri Chamundeshwari Sugar Ltd., t .....

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visions relating to registration are very clear and there cannot be two registrations in respect of the same premises. The decision cited by the learned counsel is not of any help since in that case two manufacturers did not operate from the same premises. The owner of the earlier premises had ceased to function and was no longer in the business of manufacture and therefore there was only one person operating from the premises. Under such circumstances, Hon ble High Court took a view that the de .....

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)(c) of Central Excise Act, 1944 (Act) provide that place of removal can be a factory, warehouse, or any other premises wherein excisable goods have been permitted to be deposited without payment of duty, a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory. The transaction value is required to be determined at the place of removal. 5. The concept of place of removal itself has undergone .....

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hich requirement continues even now and the daily stock register shows the stock in the warehouse. Warehouse of a factory is the place wherein statutorily, a manufacturer can keep the goods manufactured by him without payment of duty. This is because even though the taxable event for levy of Central Excise duty is manufacture, collection takes place only at the time of removal. That being the position, during the time between the removal of the goods from the factory and the manufacture, the goo .....

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can be deemed to have been removed on the date on which the factory premises were handed to Sri Chamundeshwari Sugars Ltd. There is no dispute about the fact that a copy of the agreement was provided to the department by Sri Chamundeshwari Sugars Ltd., for obtaining the registration certificate since this is one of the essential documents about the control over the premises which is verified by the officers while granting registration certificate. It cannot be said that the authority granting re .....

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ly the natural conclusion that would arise is that the officers were aware that appellant was an assessee who was clearing the goods without manufacturing the same and both the appellant and Sri Chamundeshwari Sugars were operating from the same warehouse as far the clearances are concerned. I have already observed that levy of duty or demand of duty arises only when the goods are removed from the place of removal. Therefore, the question boils down to the fact as to whether two people can opera .....

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n used by the appellant for keeping their goods in stock and the other portion would have been used by Sri Chamundeshwari Sugars Ltd. to keep their stock. There is no contrary finding that such is not the case, or there was any defect or mix-up. It was also submitted that the sugar manufactured by the appellant could not have been cleared in the name of Sri Chamundeshwari Sugars Ltd. and therefore the appellants adopted this process. However, I do not consider this to be a relevant factor. If th .....

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f inputs and the credit admissible thereon and the existing credit in the books and for transfer thereof there are clear provisions. However, there are no specific provisions in the law as regards the finished products lying in the factory. Even if the finished products are also sold along with the factory, the person buying the factory naturally will have to pay the duty on the goods purchased and make arrangements to store such goods elsewhere or seek permission to keep the goods within the fa .....

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certificate issued to the appellant, it should be said that they continue to have the right to manufacture goods in the same factory and to clear the goods from the same warehouse. There is only one place in the law where operation of a factory by two persons or more than one person has been considered, i.e. in respect of SSI units. The notification clearly provides that if one or more persons make clearances from the same factory, clearances made by all of them have to be clubbed for the purpo .....

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nces can be there by two persons from the same factory. If there was no provision for clearances by two manufacturers from one factory, this clause was not at all required. 9. With the segregation of place of removal and non-existence of concept of normal price at the factory gate, and provisions relating to place of removal providing that it can be a depot which may be of a consignment agent would show that there can be different places of removal. That being the position, when the same wa .....

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