By TIOL News Service

MUMBAI, MAR 12, 2015: THE applicant was issued a show cause notice by the Registry on the ground that their appeal is not maintainable against Commissioner's direction rejecting the permission under Rule 4(4) of Central Excise Rules, 2002.

The facts: - The applicant was having difficulty in storing the finished goods in their factory premises as they wanted to undertake construction activity in the said place. For this purpose, they wanted to clear goods temporarily and store outside the factory without payment of duty. They sought permission from the Commissioner but the same was rejected.

For quick reference, the sub-rule(s) in question are extracted 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:

(2) …

(3) …

(4) Notwithstanding anything contained in sub-rule (1), Commissioner may, in exceptional circumstances having regard to the nature of the goods and shortage of storage space at the premises of the manufacturer where the goods are made, permit a manufacturer to store his goods in any other place outside such premises, without payment of duty subject to such conditions as he may specify.

The matter was heard by the CESTAT recently.

It is submitted that against the rejection of their application by the Commissioner,as per the provisions of Section 35B (1)(a) the appeal lies to the Tribunal. It is further submitted that the said provision provides that any person aggrieved by any decision or order passed by the Commissioner of Central Excise as an Adjudicating Authority may appeal to the Appellate Tribunal. Moreover, Section 2(a) defines Adjudicating Authority as meaning any authority competent to pass any order or decision under this Act but does not include CBEC, Commissioner (Appeals) or Appellate Tribunal.

The AR submitted that the matter involved is an administrative decision and it is not open to the applicant to approach the Appellate Tribunal.

The Bench observed -

"5. We have gone through Section 35B (1)(a), as also definition of the Adjudicating Authority under Section 2(a). We find that Rule 4(4) of the Central Excise Rules provides that the Commissioner may in exceptional circumstances having regard to the nature of the goods and shortage of storage space at the premises of the manufacturer, where the goods are made, permit manufacturer to store his goods in any other place out side such premises, without payment of duty subject to such condition as he may specify. Since the Commissioner has passed the order under the said rule, in our view this Tribunal is competent to hear an appeal against the said decision of the Commissioner and we accordingly, hold that the appeal is maintainable. We also find that the applicant has also filed early hearing application. Keeping in view the nature of the dispute, early hearing application is allowed. The case may be listed on 1 7/3/2015."

The application was allowed.

(See 2015-TIOL-463-CESTAT-MUM)