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of <h1>Tribunal rules in favor of appellant, setting aside excise duty demands and penalties</h1> <h3>M/s Jindal Tubular (India) Limited Versus The Principal Commissioner, Central Goods & Service Tax & Central Excise, Ujjain</h3> M/s Jindal Tubular (India) Limited Versus The Principal Commissioner, Central Goods & Service Tax & Central Excise, Ujjain - TMI Issues Involved:1. Demand under Section 11D of the Central Excise Act.2. Denial of Cenvat credit on input services.3. Demand of central excise duty on freight charges of goods sold on FOR basis.Issue-wise Detailed Analysis:Demand under Section 11D:The appellant, M/s Jindal Tubular India Limited, supplied MS pipes to M/s Navayuga Engineering Company Limited under an exemption notification. The appellant chose to pay 6%/7% of the value of the final products under Rule 6(3) of the Cenvat Credit Rules (CCR), 2004. The Department contended that the appellant recovered this amount as representing excise duty, necessitating its deposit under Section 11D of the Central Excise Act. However, the appellant argued that the amount was not collected as excise duty but as an obligation under Rule 6(3)(i) of CCR.The Tribunal referred to the Larger Bench decision in Unison Metals Vs. Commissioner of Central Excise, which established that amounts collected under Rule 57CC of the Modvat Rules (similar to Rule 6(3)(i) of CCR) need not be deposited under Section 11D if not represented as excise duty. The Tribunal also noted the CBEC Circular No. 870/08/2008-CX, which clarified that amounts paid under Rule 6 of CCR do not attract Section 11D. Consequently, the Tribunal concluded that the appellant did not collect the amount as excise duty, thus setting aside the demand under Section 11D.Denial of Cenvat Credit on Input Services:The impugned order denied Cenvat credit of Rs. 4,13,596/- for rent-a-cab services used by the appellant's employees and customers. The appellant cited the Gujarat High Court's decision in Commissioner of Central Excise, Customs & Service Tax, Vadodara Vs. Transpek Industry Ltd., which held that rent-a-cab services used by employees for business purposes qualify as 'input service' eligible for Cenvat credit.The Tribunal, following the Gujarat High Court's judgment, ruled that the appellant is entitled to Cenvat credit for rent-a-cab services, thereby setting aside the denial.Demand of Central Excise Duty on Freight Charges:The appellant supplied goods on a FOR destination basis, raising the question of whether freight charges should be included in the assessable value for excise duty. The Supreme Court in CCE & Customs Vs. Roofit Industries Ltd. held that for FOR destination sales, the place of removal is the buyer's premises. However, in CCE, Nagpur Vs. Ispat Industries Ltd., the Supreme Court clarified that the place of removal must be the seller's premises, not the buyer's, even for FOR sales.The Tribunal referred to the CBEC Circular No. 1065/4/2018-CX, which aligned with the Ispat Industries decision, stating that the place of removal is always the seller's premises. Consequently, the Tribunal ruled that freight charges from the seller's premises to the buyer's premises are not includible in the assessable value, setting aside the demand.Conclusion:The Tribunal found all three demands unsustainable on merits and set aside the penalties. The impugned order dated March 19, 2019, was thus set aside, and the appeal was allowed with consequential relief to the appellant.
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