Storage of inputs imported duty free under Advance authorisation out side factory premises.

[Narendra Soni]

Dear Expert,

Please let us suggest procedure and Rule under which we can store our inputs imported under Advance Authorisation out side factory premises.

[Rajagopalan Ranganathan]

Sir,

Rule 8 of CENVAT Credit Rules, 2004 stipulated that-

"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:

Provided that 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.

In your case you are importing the the inputs under Advance Authorization without payment of duty I feel you need not take any permission from the jurisdictional Deputy/Assistant Commissioner. However you have meet you obligation under FTP and the conditions imposed by DGFT.

[Narendra Soni]

Thanks for valuable guidance.

We have granted permission under Rule 8 for storage of CENVTABLE inputs. Can we store our duty free inputs imported under Advance Authorisation at that places also a/w cenvatable inputs.

[Rajagopalan Ranganathan]

Sir,

If you got permission to store duty paid inputs outside your factory premises, then the department will not allow you to store inputs imported without payment of duty under Advance Authorization since there is a possibility of mixing up of the inputs. If inputs are different you may approach the jurisdictional Deputy/Assistant Commissioner for permission to store the above mentioned inputs along with the duty paid inputs subject to conditions imposed by him. Bur I am able to quote any authority for the same.

[Narendra Soni]

we have been applied for granting permission for storage of duty paid as well as non duty paid inputs and permission has been granted for storage of cenvatable inputs in response to our application.

We procure duty paid as well as non duty paid inputs procured under advance authorisation schemes, however both types of inputs are of excisable and cenvatable nature.

Inputs procured without payment of duty under advance authorisation schemes are of duty free nature hence cenvat credit can not be availed which can otherwise be eligible for availment of credit if duty has been paid.

As the permission has been granted in response to our application which was applied for storage of duty paid as well as non duty paid inputs, Please suggest should we store both duty paid and non duty paid items procured under advance authorisation schemes in the permitted space.

Kindly suggest us Rule and Notification under which permission for storage of non duty paid goods procured under advance authorisation schemes out side factory premises sought to be taken so that we can apply and obtain permission for storage of that types of inputs also.

AI Summary

Storage of inputs outside factory: permission tied to CENVAT credit; duty free Advance Authorisation inputs need separate approval. The CENVAT Credit Rules permit the Commissioner to allow storage of inputs outside a factory only where CENVAT credit has been taken, subject to conditions and repayment if inputs are not used as required. Duty free inputs imported under Advance Authorisation, on which credit is not availed, are not automatically covered by that permission; separate departmental approval is required to avoid mixing and to ensure compliance with foreign trade policy and DGFT conditions.