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2024 (12) TMI 76
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....r during CERA Audit observations, a show cause notice was issued and such amount of 10.3% reversed by the appellant was sought to be recovered from the appellant applying Section 11D of Central Excise Act, 1944 and accordingly, the demand was confirmed through impugned order. Therefore, the present appeal filed by the appellant. 2. Shri Keyur Kamdar, Learned Chartered Accountant appearing on behalf of the appellant submits that the amount of Rs. 66.74 Lakhs for which the debit note has been issued to the customers was reversed by the appellant, therefore, as per the CBEC Circular No.870/08/2008-CX dated 16.05.2008 which clarifies that the amount of 10% is paid under Rule 6 of Cenvat Credit Rules, 2004, provision of Section 11D is not applicable even if such amount is recovered from the buyer. He also take support in the case of Jindal Tubular (India) Ltd vs. Principal Commissioner, CGST & CE , Ujjain- 2023 (4) CENTAX 3 - Tri Delhi. He submits that in view of above , the impugned order is liable to be quashed. 3. Shri Anoop Kumar Mudvel, Ld. Superintendent (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. 4. We have carefully considered t....
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....ay be, shall be adjusted against the duty of excise payable by the person on finalisation of assessment or any other proceeding for determination of the duty of excise relating to the excisable goods referred to in 7[sub-section (1) and sub-section (1A)]. (5) Where any surplus is left after the adjustment under sub-section (4), the amount of such surplus shall either be credited to the Fund or, as the case may be, refunded to the person who has borne the incidence of such amount, in accordance with the provisions of Section 11B and such person may make an application under that section in such cases within six months from the date of the public notice to be issued by the Assistant 8[Principal Commissioner of Central Excise or Commissioner of Central Excise for the refund of such surplus amount.]" 4.1 From the plain reading of Section 11D, it is found that firstly the recovery under Section 11D can be made only when an asseesee recovers any amount in the name of excise duty and does not deposit to the government exchequer. In the present case the amount so recovered, firstly not a duty of excise and secondly, the same amount has been reversed by the appellant. Therefore,....
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....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". 5. Board's circular No. 599/36/2001-CX dated November, 2001 stands withdrawn. 6. The field formations as well as trade and industry may be suitably informed. 7. Hindi version will follow." 4.2 From the above circular it is has been clarified that any amount reversed under erstwhile Rule 57CC of Central Excise Rules, 1944 or Rule 6 (3) (1) of Cenvat Credit Rules, 2004and even though the same is recovered from the customers, the provision of Section 11D shall not apply. Therefore, the present issue stands clarified by the board under the aforesaid circular. Moreover, this issue has been considered by this tribunal in the case of Jindal Tubular (India) Ltd (Supra) wherein the following order was passed:- "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 it....
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....s per Section 11D which reads as follows: "Section 11D Duties of excise collected from the buyer to be deposited with the Central Government. - Notwithstanding anything to the contrary contained in any order or direction (1) of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder, every person who is liable to pay duty under this Act or the rules made thereunder, and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under this Act or the rules made thereunder from the buyer of such goods in any manner as representing duty of excise, shall forthwith pay the amount so collected 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 L....
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....estion, 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 the original Bench for disposal." 10. Learned Counsel for the appellant further submits that subsequent to this order of the Larger Bench, the Central Board of Excise and Customs had issued Circular No. 870/08/2008-CX. Dated May 16, 2008 communicating that the Department has accepted this judgment and directed as follows: "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 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, t....
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.... 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 which would be recoverable under section 11D. Notwithstanding the inaccurate description of this amount recovered by the appellant from its customers, it is clear from the agreement that the buyer was not paying this amount thinking it to be excise duty but was paying it as a reimbursement of an amount under Rule 6(3)(1) of CCR. 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 ....
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....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.T. 221/[2015] 57 taxmann.com 363/51 GST 350 (SC) the Supreme Court held that where the goods are sold on FOR destination basis the sale is complete only when the change in property takes place at the buyer's premises and, therefore, the place of removal will be the buyer's premises. Subsequently, in the case of CCE, Nagpur v. Ispat Industries Ltd. 2015-TIOL-238-SC = 2015 (324) E.L.T. 670/[2015] 62 taxmann.com 97/52 GST 889 (SC), the Supreme Court held that the "place of removal" under section 4 of the Central Excise Act must be a place relatable to the seller i.e., the factory gate or depot or premises of consignment agent, etc. and cannot be the buyer's premises because the place of removal under section 4 has to be the place from where the goods are to be sold after removal. Once the sale is completed at the buyer's premises there is n....
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....#39;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 transit damage on the assessee's account would imply that till the goods reached their destination, ownership in the goods remained with the supplier, namely, the assessee, freight charges would have to be added as a component of excise duty. Further, as per the terms of the payment clause contained in the procurement order, payment was only to be made after receipt of goods at the premises of the buyer. On facts, therefore, it was held that the sale of goods did not take place at the factory gate of the assessee. Also, this Court's attention was not drawn to Section 4 as originally enacted and as amended to demonstrate that the buyer's premises cannot, in law, be "a place of removal" under the said Section." 21. Subsequently, Circular No. 1065/4/2018-CX dated 8-6-2018 was issued by the CBEC communicat....
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....ination 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 dealt in terms of Circular no. 999/6/2015-CX dated 28-2-2015 as the judgments cited above did not deal with issue of export of goods. In these cases otherwise also the buyer is located outside India. 5. CENVAT Credit on GTA Services etc: The other issue decided by Hon'ble Supreme Court in relation to place of removal is in case of CCE &ST v. Ultra Tech Cement Ltd dated 1-2-2018 in Civil Appeal No. 11261 of 2016 on the issue of CENVAT Credit on Goods Transport Agency Service availed for transport of goods from the 'place of removal' to the buyer's premises. The Apex Court has allowed the appeal filed by the Revenue and held that CENVAT Credit on Goods Transport Agency service availed for transport of goods from the place of removal t....