Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
Open DEMAT Account with in 24 Hrs and start investing now!
« VAT (Value Added Tax) »
Open DEMAT Account in 24 hrs
 Gujarat slashes tax on ATF by 5 per cent
 CENVAT Credit can’t be denied If ISD invoices issued for distribution of ITC prior to Registration
 1 step forward, 2 steps back. Is GST going the VAT way?
 1 step forward, 2 steps back. Is GST going the VAT way?
 Pending VAT comes to haunt companies claiming input tax credit
 One-time settlement of VAT, excise disputes in the works
 Haryana government uploads photos of VAT defaulters
 Filing of online return for 4th quarter of 2017-18 extension of period thereof.
 No Cenvat credit admissible on outward transportation services from factory to buyer’s premises
  Filing of reconciliation return in form 9 for the year 2016-17
 Govt may send notice to 162 companies; ask for VAT returns

Storage of inputs outside manufacturers factory cenvat credit
September, 25th 2014

Storage of Inputs outside the Factory of Manufacturer (Rule 8)

The Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction over the factory of a manufacturer of the final products may, in exceptional circumstances having regard to the nature of the goods and shortage of storage space at the premises of such manufacturer, by an order, permit such manufacturer to store the input in respect of which CENVAT credit has been taken, outside such factory, subject to such limitations and conditions as he may specify.

However, where such input is not used in the manner specified in these rules for any reason whatsoever, the manufacturer of the final products shall pay an amount equal to the credit availed in respect of such input.

Thus, this rule applies only to manufacturers (and not to service providers) and provides flexibility to manufacturer/factory to store inputs at a place other than factory but only after approval from the jurisdictional Deputy or Assistant Commissioner, after considering -

(i) nature of goods

(ii) storage space

subject to conditions as may be imposed in writing by way of an order.

Judicial Pronouncements

In Deepak Fertilizers and Petrochemicals Corporation Ltd. v. CCE, Belapur 2013 (4) TMI 44 - BOMBAY HIGH COURTwhere assessee took credit of services used in relation to erection, commissioning and installation of storage tank for storage of inputs viz. imported ammonia outside factory, in view of rule 3(1) of Cenvat Credit Rules, 2004 that input services may be received anywhere and credit is available if they are received by manufacturer, it was held that services in relation to erection, commissioning and installation of storage tank facility for storage of imported inputs/ammonia outside factory were eligible as input services for availing Cenvat credit.

In Nitcon Industries (P) Ltd v. CCE, Mumbai-II 2014 (9) TMI 681 - CESTAT MUMBAIit was held that any service availed by assessee who was a manufacturer of excisable goods in course of their business is entitled for Cenvat credit. It was immaterial whether such premises were within factory or outside that. Accordingly, service tax paid on rent of premises used for storage of manufactured goods was eligible for input service credit for the assessee.

In Triveni Engg. and Inds. Ltd v. CCE, Meerut-II 2014 (9) TMI 680 - CESTAT NEW DELHI,wherein weighbridge was outside the factory for weightment of sugar-cane during crushing season and receipt, ownership and genuine acquisition was not disputed, it was held that weightment is an integral part of process of sugar industry, therefore any interpretation to deny capital goods credit shall defeat spirit of law. Accordingly assessee was eligible to avail Cenvat credit on the same.

In Maihar Cement v. CCE, Bhopal 2012 (5) TMI 550 - CESTAT NEW DELHIwherein assessee used explosives in mines, it was held that Cenvat credit was admissible on captive mines, which means assessee’s own mines rather than mine those around factory of assessee. Mines by very nature could not be inside factory. Hence, Cenvat credit could not be denied on ground that mines were situated 3 to 4 kms away from factory. [Case followed: Madras Cements Ltd v. CCE, Chennai 2010 (7) TMI 179 - SUPREME COURT ].

In Hi Tech Power and Steel Ltd v. CCE, Raipur 2013 (7) TMI 752 - CESTAT NEW DELHIit was held that construction service of coal shed for storage was eligible for Cenvat credit of service tax as shed constructed for storage of coal was required for manufacturer of finished goods. [Cases relied: Coca Cola India Pvt. Ltd. v. CCE, Pune-II 2009 (8) TMI 50 - BOMBAY HIGH COURT; CCE, Pune-II v. Raymond Zambaiti Pvt Ltd 2010 (3) TMI 402 - CESTAT, MUMBAI ].

Home | About Us | Terms and Conditions | Contact Us
Copyright 2023 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting