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TMI Blog2024 (12) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... customers, the provision of Section 11D shall not apply. Therefore, the present issue stands clarified by the board under the aforesaid circular. Thus, the amount reversed by the appellant under Rule 6(3) and even though recovered from the customer, provision of Section 11D shall not apply. Hence, the demand under Section 11D is not sustainable. The impugned order is set aside - Appeal is allowed. - HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR And HON'BLE MEMBER (TECHNICAL), MR. C L MAHAR Shri Keyur Kamdar, Chartered Accountant appeared for the Appellant Shri Anoop Kumar Mudvel, Superintendent (AR) appeared for the Respondent ORDER RAMESH NAIR The brief facts of the case are that the appellant is the manufacturer of DG Sets and sold DG Sets to M/s. Jay Prakash Associates Ltd at nil rate of excise duty under exemption notification no. 03/2004-CE dated 08.01.2024 and also reversed the Cenvat credit of Rs. 66.74 Lakhs under Rule 6 (3) (1) of Cenvat Credit Rules, 2004 at the rate of 10.3%. Due to non- availability of credit to the customers, the debit note was issued for recovery of amount of Rs. 66.74 Lakhs recovered from the buyer stating that such amount is not eligible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collected any amount in excess of the duty assessed or determined and paid on any excisable goods or has collected any amount as representing duty of excise on any excisable goods which are wholly exempt or are chargeable to nil rate of duty from any person in any manner, shall forthwith pay the amount so collected to the credit of the Central Government. 4[(2) Where any amount is required to be paid to the credit of the Central Government under 5[subsection (1) or sub-section (1-A), as the case may be,] and which has not been so paid, the Central Excise Officer may serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government. (3) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under sub-section (2), determine the amount due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. (4) The amount paid to the credit of the Central Government under 6[sub-section (1) or sub-section (1A) or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t amounts falsely representing them as Central Excise duty and retain them, thus, unjustly benefiting themselves. However, in case of payments made under erstwhile rule 57CC(1), section 11D of the Act is not applicable since the amount of 8% or 10% has already been paid to the revenue and no amount is retained by the assessee. The said order of the Tribunal has been accepted by the Department. 3. The matter has been examined. Sub-rule (3) of rule 6 of the CENVAT Credit Rules, 2004 has been amended w.e.f. 01.04.2008 to provide for payment of an amount equal to 10% of value of the exempted goods, instead of 10% of the price of the exempted goods as provided earlier. The value is to be determined as per section 4 or 4A of the Central Excise Act, 1944 read with rules made thereunder. 4.In the light of what is sated above, it is clarified that as long as the amount of 8% or 10% is paid to the Government in terms of erstwhile rule 57CC of the Central Excise Rules, 1944 or rule 6 of the CENVAT Credit Rules, the provisions of section 11D shall not apply even if the amount is recovered from the buyers. However, it may be noted that the CENVAT credit of the said amount of 8% or 10% cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the pipes and in respect of internal coating of the pipes 7% ED reversal shall be shared by both parties @ 3.5% each. Therefore, it was clearly understood by two parties that what was being paid by the customer was not Central Excise duty but an amount of 7% of the value of the pipes under Rule 6 (3) of CCR inaccurately mentioned as excise duty reversed . The invoices produced by the appellant before us clearly indicate excise duty exempted under Condition No. (ii) of the Notification No. 3/2004-CE dated January 08, 2004 in force from date on 9-1-2004 . To enable the supplier to supply the above goods at nil rate of excise duty the customer has to produce necessary certificate. However, in the invoice after price of the pipes there are two entries one pertaining to VAT @ 5% and another pertaining to the amount paid under Rule 6(3)(1) indicated inaccurately as Excise duty reversal @ 6%. 7. It is the case of the Department that the appellant has recovered this amount from its customers as representing excise duty and, therefore, the same needs to be deposited in the exchequer as per Section 11D which reads as follows: Section 11D Duties of excise collected from the buyer to be depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in any manner representing as duty of excise, shall forthwith pay the amount so collected to the credit to the Central Government has application only when equivalent duty had not been deposited at the time of removal of the goods. The scheme of the law is that manufacturers shall not collect amounts falsely representing them as central excise duty and retain them, thus unjustly, benefiting themselves. In the present cases, (irrespective of whether the 8% payments were duty or not) since the 8% amount remain already paid to the revenue, and no amount is retained by the assessee. Section 11D has no application. 10. The real identity of the amount 'collected' (whether excise duty payable or not) is of no relevance for Section 11D. What is relevant is only whether the collection was 'represented' as duty of excise. The representation may as well be entirely false. The qualifying of the representation through the words 'in any manner' makes this clear. Therefore, the contentions of both sides on the question, as to whether deposits under Rule 57CC are excise duty or not, are beside the point. 11. Reference is answered as above and the appeals are returned to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this 8% duty by showing separately in the invoices from their buyers, therefore, the provisions of Section 11D are applicable and the appellants are not entitled for this amount. The appeal is dismissed. 13. He submits that the present case is also one where the invoices show excise duty reversal and, therefore, G.S. Pharmabutor squarely case applies. It would have been a different matter if the amount was shown as an amount under Rule 6(3)(1) of CCR, 2004. 14. We have considered the submissions of both sides with respect to this part of the impugned order. 15. We find from the agreement and the invoices that the buyer was fully aware that the goods were fully exempted and no excise duty was liable to be paid. In fact, the buyer was required to provide an excise duty exemption certificate to the appellant to avail the benefit of exemption notification. However, the buyer also agreed to pay to the appellant an amount equal to 7% which it paid under Rule 6(3)(1). However, both the agreements and the invoices inaccurately mentioned this as excise duty reversal . This might give impression this is an amount recovered by the appellant from the customer as representing the excise duty wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. 2016-53-VST-317, the High Court has decided that rent-a-cab services in respect of cab used by the employees of the assessee is an input service and Cenvat credit is available on it. 18. Learned Departmental Representative reiterates the findings of the impugned order with respect to this. 19. After considering the submissions of both sides, respectfully following the judgment of High Court of Gujarat in Transpek Industry Ltd., we hold that the appellant is entitled to the Cenvat credit for the service tax paid on rent-a-cab services. Demand of Rs. 3,95,550/- towards central excise duty on freight charges of goods sold on FOR basis to the customers premises: 20. The appellant has supplied the goods on which it paid excise duty to the customers on FOR destination basis. In other words, in such contracts the appellant was required to deliver the goods at the buyer's premises and not its factory gate. The question is whether cost of freight from the factory/depot of the appellant to the customer's premises is includible in the assessable value for calculating the central excise duty. In the case of CCE Customs v. Roofit Industries Ltd. 2015-TIOL-87-SC-CX = 2015 (319) E.L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus be seen that, in law, it is clear that for the period from 28-9-1996 up to 1-7-2000, the place of removal has reference only to places from which goods are to be sold by the manufacturer, and has no reference to the place of delivery which may be either the buyer's premises or such other premises as the buyer may direct the manufacturer to send his goods. As a matter of law therefore the Commissioner's order and Revenue's argument based on that order that freight charges must be included as the sale in the present facts took place at the buyer's premises is incorrect. Further, for the period 1-7-2000 to 31-3-2003 there will be no extended place of removal, the factory premises or the warehouse (in the circumstances mentioned in the Section), alone being places of removal. Under no circumstances can the buyer's premises, therefore, be the place of removal for the purpose of Section 4 on the facts of the present case. 32. It will be seen that this is a decision distinguishing the Escorts JCB's case on facts. It was found that goods were to be delivered only at the place of the buyer and the price of the goods was inclusive of transportation charges. As tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re excisable goods are to be sold . These are key words of the sub-section. The place or premises from where excisable goods are to be sold can only be manufacturer's premises or premises referable to the manufacturer. If we were to accept contention of the revenue, then these words will have to be substituted by the words have been sold which would then possibly have reference to buyer's premises. 4. Exceptions: (i) The principle referred to in para 3 above would apply to all situations except where the contract for sale is FOR contract in the circumstances identical to the judgment in the case of CCE, Mumbai-III v. Emco Ltd 2015 (322) E.L.T. 394 (S.C.) and CCE v. M/s Roofit Industries Ltd 2015 (319) E.L.T. 221 (S.C.). To summarise, in the case of FOR destination sale such as M/s Emco Ltd and M/s Roofit Industries where the ownership, risk in transit, remained with the seller till goods are accepted by buyer on delivery and till such time of delivery, seller alone remained the owner of goods retaining right of disposal, benefit has been extended by the Apex Court on the basis of facts of the cases. (ii) Clearance for export of goods by a manufacturer shall continue to be d ..... 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