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2022 (7) TMI 1240 - AT - Central ExciseDemand of Central Excise duty under Section 11D of CEA - Reversal of Cenvat Credit - Cenvat credit of rent-a-cab services used by the employees and customers of the appellant for business purposes - input services or not - freight 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. Demand of Central Excise duty under Section 11D of CEA - 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 - HELD THAT:- 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” - 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 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. Demand of Rs. 3,95,550/- towards central excise duty on freight charges of goods sold on FOR basis to the customers premises - HELD THAT:- The issue is now settled by the Supreme Court in the case of COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, NAGPUR VERSUS M/S ISPAT INDUSTRIES LTD. [2015 (10) TMI 613 - SUPREME COURT] that the place of removal in every case has to be only the place relatable to the seller and it cannot be the buyer’s premises even though the sale may be completed at the buyer’s premises when goods are sold on FOR destination basis. The “place of removal” continues to be the seller’s premises whether it be the factory gate or depot or any other place relatable to the seller. In terms of Section 4 of the Central Excise Act, value of the goods is the transaction value of the goods for delivery at the time and place of removal. The freight incurred from the place of removal to the buyer’s premises cannot, therefore be includible in the assessable value. Penalty - HELD THAT:- All the three demands are not sustainable on merits, the penalty also needs to be set aside. Appeal allowed - decided in favor of appellant.
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