Rule 8 – Storage of inputs outside the factory of the manufacturer :

(1) The Assistant/Deputy Commissioner can permit the inputs in respect of which CENVAT has been taken to be stored outside the factory of the manufacturer concerned. However, such storage of inputs outside the factory shall be allowed only in the exceptional circumstances having regard to the nature of the goods and shortage of storage space at the premises of such manufacturer, and shall be subject to suitable safeguards against any loss of revenue.

(2) Where such inputs are not subsequently used in the manner prescribed in these rules for any reason whatsoever, it has been stipulated that the manufacturer of the final products shall pay an amount equal to the credit availed in respect of such inputs.