2015 (1) TMI 212 - AT - Central Excise

Rejection of permission for additional space for storage of raw material - denial on the premise that the appellant has not made out export obligation - Held that - The fact is that the production capacity of the unit has been increased five times after taking the possession of the unit from the earlier owner. Further, the appellant has taken due permission from the Development Commissioner who is authorized to grant Export Licence. I also find that there is no adverse report against the appellant. In these circumstances, the lower authorities have granted the permission to add the additional space for storage of raw material in their licence. Further, I find that there is no bar that only the adjacent place shall be allowed for the storage of raw material. In these circumstances, I hold that the additional space sought by the appellant for the storage of raw material is to be allowed in their licence. - Decided in favour of assesse.

Summary

Issues: Appeal against rejection of permission for additional storage space for raw material.

Analysis:
1. Facts of the Case: The appellant, a 100% EOU, sought additional space for storage of raw material after expanding plant capacity. Permission was granted by the Development Commissioner but denied by customs authorities due to alleged failure in meeting export obligations.

2. Appellant's Argument: The appellant contended that increased production capacity necessitated extra storage space, supported by permission from the Development Commissioner. No adverse reports were found against them, and no legal provision barred the addition of space to their license.

3. Respondent's Argument: The respondent argued that additional space should be allowed only if adjacent to factory premises. The proposed space was 1 km away, leading to the denial of permission.

4. Judgment: After considering both sides, the tribunal noted the substantial increase in production capacity and the absence of adverse reports. The Development Commissioner's approval was crucial, and no legal provision restricted adding space. The tribunal ruled in favor of the appellant, allowing the additional storage space in their license. The lower authorities were directed to implement the order within 30 days.

5. Conclusion: The appeal was allowed with consequential relief, emphasizing the importance of production capacity increase and proper permissions in justifying the need for additional storage space. The judgment highlighted the absence of legal barriers to adding space and the significance of the Development Commissioner's approval in such matters.