By TIOL News Service

MUMBAI, JAN 01, 2015: THE appellant purchased the premises in question from M/s Akasha Syncotex Ltd. who initially was the lessee of the factory premises from MIDC. As M/s Akasha Syncotex Ltd. closed the business from the said premises and applied for cancellation of Central Excise registration, the appellant being interested party for taking the said premises had entered into an agreement with M/s. Akasha Syncotex Ltd. and with due permission from MIDC, the factory premises got leased out in the name of the appellant.

The appellant applied for registration under Central Excise Act for the product manufactured by them.

The Revenue was in no mood to grant the registration and so issued a SCN to deny Central Excise registration which was adjudicated and held in favour of the appellant that they are entitled for registration but on appeal by the Revenue, the Commissioner (Appeals) denied the registration granted.

And so, the appellant is before the CESTAT.

It is submitted that the Commissioner (A) relied on the decision of the Manibhadra Processors which is distinguishable and the decisions in Tata Metaliks Ltd. - 2008-TIOL-140-HC-MUM-CX & PMS Exports P. Ltd. - 2013-TIOL-823-CESTAT-AHM apply to the facts of their case inasmuch as the impugned order is required to be set aside as they are entitled for Central Excise registration.

The AR submitted that the facts involved in Tata Metaliks Ltd. are not similar in the sense that in that case the property was taken over by the financial institution and thereafter auction took place and the property was taken over by Tata Metaliks Ltd.

The Bench extracted the conclusion arrived at by the High Court in the case of Tata Metaliks Ltd. and thereafter observed -

"7. Although in the case, the property in question was taken by the assessee in auction done by the Financial institution, but the question remains whether the registration can be granted or not where in case the dues are pending against the producer of the premises holder. In the case of Manibhadra Processors (supra) the facts of the case are peculiar one as in the case it is a habit of the lessor to lease out the property to the lessee who defaulted the Central Excise payment and surrender the registration and thereafter another lessee came to the factory and also defaulted in Central Excise dues. If I consider the facts of the Manibhadra Processors (supra) in that case initial registration was granted and the registration holder defaulted thereafter another registration was granted which also defaulted. Therefore, in that case the Hon'ble High Court exercised their power in writ jurisdiction and stopped the granting of registration for misusing the factory premises. The issue came up before the Tribunal in PMS Exports P. Ltd. (supra), the facts of the said case are similar to the facts of the case in hand. In that case the Tribunal after considering the relevant provisions, which are incorporated in para 6 above and came to the conclusion that registration in similar facts can be granted."

Holding that there is no merit in the order of the Commissioner (A), the same was set aside and the appeal was allowed with consequential relief

(See 2015-TIOL-04-CESTAT-MUM)