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TMI Blog2022 (7) TMI 1240X X X X Extracts X X X X X X X X Extracts X X X X ..... paid under Rule 6(3)(1). However, both the agreements and the invoices inaccurately mentioned this as excise duty reversal - The invoices also indicate that the excise duty is exempted under Notification NO. 3/2004. Further, below the excise duty reversal @ 6% in the invoice, it is mentioned in amount paid under Rule 6(3)(i) of CCR . Needless to say, since this is not an amount of excise paid by the appellant and the buyer M/s Navayuga Engineering Company Limited will not be entitled to Cenvat credit of the amount so paid. However, that matter is beyond the scope of this appeal. What is important for this appeal is whether the appellant has collected the amount as representing Excise duty from its customers which does not appear to be the case from the agreement and from the invoices - this part of the demand cannot be sustained and needs to be set aside. Cenvat credit of rent-a-cab services used by the employees and customers of the appellant for business purposes - input services or not - HELD THAT:- The High Court in the case of COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, VADODARA VERSUS TRANSPEK INDUSTRY LTD. [ 2017 (10) TMI 86 - GUJARAT HIGH COURT] has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest under Section 11 DD of the Central Excise Act, 1944 on the amount of Rs. 7,35,07,617/- confirmed for recovery from the Noticee i.e. M/s Jindal Tubular (India) Ltd., Industrial Area, Sector 11, Pithampur, Distt. Dhar (M.P.); 2(i) I disallow Cenvat Credit of Input Service of Rs. 4,13,596/- (Rupees Four lakh Thirteen thousand Five hundred Ninety Six only) and order for recovery from the Noticee i.e. M/s Jindal Tubular (India) Ltd. Industrial Area, Sector-11, Pitampur, Distt. Dhar (MP) in terms of Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A(4) of the Central Excise Act, 1944; 2(ii) I impose a penalty of Rs. 2,06,798/- [50% of Rs. 4,13,586/-] upon the Noticee i.e. M/s Jindal Tubular (India) Ltd., Industrial Area, Sector-11, Pithampur, Distt. Dhar (M.P). Rule 15(2) of the Cenvat Credit Rules, 2004 read with under Section 11AC the Central Excise Act, 1944. However, benefit of reduced penalty of 25% of aforesaid confirmed demand of Rs. 2,06,798/- as per changed provisions of Section 11AC(1)(e) read with Explanation 1(iii) just below the said section vide Finance Act, 2015 dated 14.05.2015, is available to the Noticee subject to the condition that the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reight charges paid for transport of goods from the appellant s premises to the customer s premises when goods were sold on FOR basis to the customers by the appellant. 3. The appellant contested the show cause notice and after but the Principal Commissioner passed the impugned order. Aggrieved by this order, the present appeal is filed. 4. We have heard learned Counsel for the appellant and learned Authorised Representative of the Department and perused the records. We proceed to deal with each of the three items: Demand under Section 11D 5. The appellant manufactures MS pipes which it supplied to M/s Navayuga Engineering Company Limited for use in a project. It is undisputed that the goods supplied under this project were exempted by Notification No. 3/2004-CE dated January 08, 2004 and that this exemption was available to the goods cleared by the appellant. As these goods were exempted, the appellant had an obligation to fulfil one of the conditions under Rule 6 (1), 6 (2) or 6 (3) of the Cenvat Credit Rules, 2004 [ CCR ]. Rule 6 (1) requires the assessee not take Cenvat credit on the input and inputs services used manufacture of exempted goods. Rule 6 (2) requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected to the credit of the Central Government. 8. The case of the appellant is that what is recovered by them is only an amount which it was required to pay under Rule 6(3)(i) as a part of its obligations under CCR. It has not recovered any amount as representing Central Excise duty. Therefore, Section 11D is not applicable to this case as they have not recovered any amount whatsoever as representing the central excise duty. 9. Learned Counsel for the appellant relies on the judgment of Larger Bench of the Tribunal in the case of Unison Metals Vs. Commissioner of Central Excise [ (2006) TIOL 1337 CESTAT-DEL.-LB ]. In that case the Tribunal was seized of a matter where an amount was paid by the assessee under Rule 57 CC of the Modvat Rules which is pari materia to Rule 6(3)(1) of CCR and recovered the same from its customers. The case of the Revenue was that this amount having been collected from the customers must be deposited by the assessee under Section 11D. The Larger Bench of the Tribunal held that it was not an amount collected as representing excise duty and hence need not be deposited under Section 11D. Paragraphs 9, 10 and 11 of this order are reproduced below: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from the buyers. However, it may be noted that the CENVAT credit of the said amount of 8% or 10% cannot be taken by the buyer since such payment is not a payment of duty in terms of Rule 3(1) of the CENVAT Credit Rules, 2004. Therefore, the said 10% amount should be shown in the invoice as 10% amount paid under Rule 6 of the CENVAT Credit Rules, 2004 . 11. Learned Counsel, therefore, submits that the impugned order, being contrary to not only the judgment of the Larger Bench of the Tribunal but also to the Board s directions, is unsustainable and needs to be set aside. 12. Per contra, learned Departmental Representative relies on the order of the Tribunal in M/s G.S. Pharmabutor (P) Ltd. Vs. CCE, Jaipur [ 2005-TIOL-138-CESTAT-DEL ] in which it was held that an amount of 8% recovered by the assessee from its customers has to be deposited under Section 11D. An appeal against this order was dismissed by the Supreme Court in Civil Appeal No. 854/2006 having regard to the meager tax involved leaving the question of law open. He submits that the distinction between G.S. Pharmabutor and Union Metals is that in the case of G.S. Pharmabutor the amount which was being recovered was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany Limited will not be entitled to Cenvat credit of the amount so paid. However, that matter is beyond the scope of this appeal. What is important for this appeal is whether the appellant has collected the amount as representing Excise duty from its customers which does not appear to be the case from the agreement and from the invoices. We, therefore, find that this case is different M/s G.S. Pharmabutor (P) Ltd. where the amount was being collected as representing excise duty in each of these invoices. The case is covered by the Larger Bench decision of the Tribunal in M/s Unison Metals Ltd., which has also been accepted by the Revenue by CBEC Circular dated 16.5.2008. Therefore, this part of the demand cannot be sustained and needs to be set aside. Denial of Cenvat credit on input services 16. In respect of rent-a-cab services, an amount of Rs. 4,13,596/- claimed by the appellant as input service for rent-a-cab services is sought to be denied by the impugned order. The appellant claims that the cabs were used by its employees and customers for business travel only and, therefore, it is entitled to the benefit of Cenvat credit as held by the High Court of Gujarat in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... removal. Once the sale is completed at the buyer s premises there is nothing more to be removed. Accordingly, the place of removal can only be the seller s premises regardless of the fact that the sale is on FOR destination basis. Relevant text of the judgment is as follows: 16. It will thus be seen that where the price at which goods are ordinarily sold by the assessee is different for different places of removal, then each such price shall be deemed to be the normal value thereof. Sub-clause (b)(iii) is very important and makes it clear that a depot, the premises of a consignment agent, or any other place or premises from where the excisable goods are to be sold after their clearance from the factory are all places of removal. What is important to note is that each of these premises is referable only to the manufacturer and not to the buyer of excisable goods. The depot, or the premises of a consignment agent of the manufacturer are obviously places which are referable only to the manufacturer. Even the expression any other place or premises refers only to a manufacturer s place or premises because such place or premises is stated to be where excisable goods are to be sold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this decision. The relevant text reads as follows: 3. General Principle: As regards determination of place of removal , in general the principle laid by Hon ble Supreme Court in the case of CCE vs Ispat Industries Ltd 2015(324) ELT670 (SC) may be applied. Apex Court, in this case has upheld the principle laid down in M/s Escorts JCB (Supra) to the extent that place of removal is required to be determined with reference to point of sale with the condition that place of removal(premises) is to be referred with reference to the premises of the manufacturer. The observation of Honb le Court in para 16 in this regard is significant as reproduced below 16. It will thus be seen where the price at which goods are ordinarily sold by the assessee is different for different places of removal, then each such price shall be deemed to be normal value thereof. Sub-clause (b) (iii) is very important and makes it clear thata depot, the premises of a consignment agent, or any other place or premises from where the excisable goods are to be sold after their clearance fromthe factory are all places of removal. What is important to note is that each of the premises is referable only the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efinition of input service under Rule 2(l) of the CENVAT Credit Rules, 2004, effective from 01.03.2008, the service is treated as input service only up to the place of removal . 6. Facts to be verified: This circular only bring to the notice of the field the various judgments of Hon ble Supreme Court which may be referred for further guidance in individual cases based on facts and circumstances of each of the case. Past cases should accordingly be decided. 7. No extended period: Any new show cause notice issued on the basis of this circular should not invoke extended period of limitation in cases where an alternate interpretation was taken by the assessee before the date of the Supreme Court judgment as the issue is in the nature of interpretation of law. 22. In view of the above, the learned Counsel for the appellant submits that regardless of the fact that sale of goods is on FOR basis, central excise duty cannot be charged on the cost of freight from their premises to the premises of the buyer. Learned Authorised Representative supports the impugned order. 23. Having considered both the submissions, we find that the issue is now settled by the Supreme Court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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