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TMI Blog2015 (11) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/3/2016. They have again submitted letter dated 18/3/2015 to the Jurisdictional Asstt. Commissioner explaining therein the reason for treating their case as exceptional nature. In response to their letter for extension of the permission, the Revenue has written letter F. No. VGN (30) 126/Tech/Sulzer-Rule 4(4)/13-14dated 27/3/2015 proposing rejection of their application and personal hearing was granted before the Commissioner of Central Pune-IV. In the personal hearing appellant explained their application and also made additional written submission vide their letter 30/3/2015. After considering application as well as the submission at the time of hearing Ld. Commissioner has rejected the application for extension of permission under Rule 4(4) of Central Excise Rules, 2002 beyond 31/3/2015. However grace period was allowed for three months beyond 31/3/2014. Aggrieved by the said order the appellant is before me. 3. 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 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to store goods outside factory. It is his submission that if the appellant is not allowed to store the goods outside factory premises then it will seriously hamper ongoing production, consequently it will affect overall business of the company. It will not only cause financial loss to the company but also to the Revenue therefore any effort/act which create hindrance in the production of the appellant will alternately tantamount to national loss. On the other hand, as regard safeguard of the Revenue there is absolutely no doubt that the there is no Revenue loss due to the permission to the appellant for storage of goods outside the factory premises for the reason that duty is payable on clearance of the goods and not otherwise. Since the outside storage is only extended premises of the factory, whether the goods stored in the factory or in the outside storage duty is not required to be paid till the goods are 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce for storage of goods. Ld. Commissioner held that the nature of goods is not like perishable therefore the criteria of nature of goods is not satisfied. As regard shortage of space, he has given reason that the Appellant have not done any efforts to increase the space and they are storing the goods outside since 2011 onwards, therefore criteria of shortage of space is also not satisfied. I do not agree with the contention of the Ld. Commissioner. The Appellant sought the permission under Rule 4(4) of Central Excise Rules, 2002 which is reproduced below: RULE 4. Duty payable on removal. ? (1) Every person who produces or manufactures any excisable goods, or who stores such goods in a warehouse, shall pay the duty leviable on such goods in the manner provided in rule 8 or under any other law, and no excisable goods, on which any duty is payable, shall be removed without payment of duty from any 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 manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d height of the space. It is very important to note that in the above rule as regard nature of the goods, it is not specified what should be nature of the goods. Therefore the nature of the goods has to be seen on case to case basis. In the present case, in my view, since the nature of the goods is such that it can not be stored more than a 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. The rule does not specify only the perishable nature of the goods, therefore the Ld. Commissioner's reasoning on this counts is misleading and without any basis. As regard the shortage of space, I find that the Appellant has demonstrated that the entire space available in their factory is being used either for manufacturing activity or for 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 Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure 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 Rule 20, is also not correct, as the outside storage premises under sub-rule (4) of Rule 4, is an extension of the factory and within the factory the goods can be kept without payment of duty and as such, there is no time limit prescribed in this regard 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation letter of the Supdt. of Central Excise, Akola was considered by the Jurisdictional Asst. Commissioner and he also recommended for the extension of permission to store the goods without payment of duty outside the factory premises. 12. In my considered view, if both the field formations i.e. Range Superintendent as well as Jurisdictional Division Office recommend the case of the appellant as has been genuine one, it should have been considered in correct perspective by the office of the Commissioner of Central Excise. On perusal of the letter dated 26.12.2014 vide which the Commissioner has not granted extension of permission to store the goods without payment of duty, is a very casually worded and does not given any reason for rejection of the request. I find strong force in the contentions raised by the learned Counsel that in an identical set of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue. The appellant in their letter dated 7-8-2010 have mentioned a number of circumstances 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. 6. 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 tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard to the nature of the goods and shortage of storage space whereas in the present case the application has elaborately explained the exceptional circumstances giving various factors. In the case of M/s. GKN Sinter Metals Pvt. Ltd tribunal has found that application did not mention the period for which permission is sought and in the present case the appellant sought permission for April,2015 to March,2016 and M/s. GKN Sinter Metals Pvt. Ltd case the Tribunal also observed that the assesse can create additional space by re-organisation of stack in which finished goods has been stored. Whereas in the present case the 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 it was found that the applicant has never misused the facility of outside ..... 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