2007 (5) TMI 44 - AT - Central Excise

Issues:
Disputed demand under Section 11D of the Central Excise Act, 1944 for exempted footwear sold by appellants.

Analysis:
The appellants, who manufacture footwear falling under Chapter 64 of the Central Excise Tariff, faced a disputed demand of Rs. 5,42,00,010/- for the period from October 1992 to July 1996. The dispute revolved around the sale of exempted footwear to wholesale buyers at a uniform price without collecting any excise duty amount from them. The case against the appellants was primarily based on the price-lists filed by them, indicating assessable value, excise duty, and cum-duty price for all footwear manufactured, including exempted items. The appellants argued that the inclusion of exempted items in the price-lists was mechanical and not a ground for raising a demand under Section 11D. They emphasized that no excise duty amount was collected from customers for exempted goods, citing relevant case law where a similar situation led to a finding that Section 11D did not apply.

The learned Senior Advocate for the appellants contended that the price-lists were not required for exempted goods as they are not chargeable to duty. The Tribunal's decision in a previous case was cited to support the argument that the absence of collecting excise duty from customers negates the applicability of Section 11D. On the other hand, the learned DR supported the impugned order, asserting that the price charged to customers included excise duty, which was collected as part of the price and thus required payment to the Government under Section 11D. After considering both sides and examining the case records, including the cited case law, the Tribunal found that although the appellants filed a comprehensive price-list inclusive of exempted items, the mere filing of such a list was insufficient to trigger Section 11D. Additionally, the Tribunal noted that when goods are not duty-chargeable, the mandatory requirement of filing a price-list does not apply. Some invoices examined by the Tribunal did not show any collection of excise duty on exempted goods, leading to a conclusion similar to the precedent cited, where Section 11D was deemed inapplicable.

In light of the above findings, the Tribunal set aside the impugned order and allowed the appeal, emphasizing that the provision of Section 11D was not applicable to the facts of the case. The operative part of the order was pronounced in court on the date of the hearing.