The pinion seal sits at the forward end of the differential where the drive shaft attaches to it. When they fail, gear oil oozes out from the differential.
The pinion seal is part of the power stearing sector. It seals the liquid in so it doesnt leak out. if it leaks then your seal is not good and it needs to be replaced.
The pinion seal is the seal that seal the pinion to the axle housing. It should be located at the front of the differential right behind the yoke or flange.