cenvat credit rules 2002 rule 8

[atul saraf]

Please let me know the maximum time period for which an assessee can seek permission to store inputs outside factory area.

[YAGAY andSUN]

According to Rule 4(4) of the Central Excise Rule, 2002. 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 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.

Therefore, the maximum period will depend on permission given by and conditions specified by the commissioner.

[NEERAJ KUMAR, RANCHI]

Dear Atul,

First of all I would like to amend your query, infact it is  Cenvat Credit Rule, 2004 and not 2002. Now coming to your query as per Rule 8  of the  CCR, 2004 :

"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. "

 As far as the time period is concerned which is your main query, I am of thhe view that there is no time period specified in the law, rather it is upto the discredtion of the jurisdictional AC or DC, who in his order as described above in Rule may specifiy the period as per your requirement or as he finds fit according to demand of nature of goods. 

[Mahir S]

At the time of making such an application to the Jurisdictional Assistnat/Deputy Commissioner, the time limit period for storing the goods outside the factory premises is to be mentioned therein, which is basically 6 months / 1 year period.  The permission is granted for such time and before the expiry of the said period, application for renewal is to be made.

 

AI Summary

Storage of inputs outside factory: permission may be granted by DC/AC subject to conditions and repayment if unused. Under Cenvat Credit Rule 8, 2004, the Deputy or Assistant Commissioner may permit storage of inputs outside a manufacturer's premises in exceptional circumstances, subject to limitations and conditions and to a period specified in the order; if an input is not used as required by the rules, the manufacturer must repay the credit availed in respect of that input.