Order Date – 26 July 2022

Facts – 

• The Appellant, M/s Jindal Tubular (India) Limited, was issued a SCN on July 19, 2018 for the period from April 2015 to March 2017 whereby an amount of Rs. 7,35,07,617/- was demanded under Section 11D of the Central Excise Act which the appellant collected from its customer M/s Navayuga Engineering Company Limited.
• Also demanded Rs. 4,13,596/-, being the Cenvat credit of rent-a-cab services used by the employees and customers of the appellant for business purposes on the ground that it is not an “input service” for the appellant and an amount of Rs. 3,95,550/- demanded towards central excise duty on the 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.
• Aggrieved the appellant filed an appeal.

Issue – 

• Whether the demands of the commissioner are justifiable?

Order – 

• Demand u/s 11D of the Central Excise Act – 

The Tribunal observed that 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. Therefore, this part of the demand cannot be sustained and needs to be set aside.

• Cenvat Credit of rent-a-cab services – 

The Tribunal following the judgment of HC of Gujarat in Commissioner of Central Excise, Customs & Service Tax, Vadodara Vs. Transpek Industry Ltd. held that the appellant is entitled to the Cenvat credit for the service tax paid on rent-a-cab services.

• Freight charges paid for transport of goods to the customer’s premises – 

The Tribunal relied on SC case CCE, Nagpur Vs. Ispat Industries in which it was held 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. Therefore, the demand is not sustainable.

In view of the above, the impugned order was set aside and the appeal was allowed.