2003 (9) TMI 514 - AT - Central Excise

Demand of duty - Deposit of the amount to the credit - benefit of exemption Notification No. 1/93 -Whether the appellants are required to deposit the duty allegedly collected by them from the customers, but not paid to the Department as they were availing the benefit of small-scale exemption Notification No. 1/93 in terms of Section 11D of the Central Excise Act, 1944 - HELD THAT - A reading of the provisions of Section 11D makes it clear that that amount which the assessee collects from their customers by representing the same as duty of excise, is required to be deposited by him to the credit of the Central Government. Evidence has to be brought on record to show that there was collection of certain amount representing duty of excise. Admittedly, in the present case, there was no collection by the appellants from their customers representing certain amount as duty of excise merely because of the simple fact that excise duty (at whichever rate payable) was already included in the Contract Value. In the present case, there is nothing on record to show that the appellants had raised the proforma invoice to their customers or they have collected any amount from the customers representing the same as duty of excise. The said duty was already in-built in the price offered by the appellants and has not been collected separately by them from their customers irrespective of the slab under which the appellants were working. As such it is not possible to say that the appellants had collected money representing as duty, from their customers in addition to the amount shown in the gate pass or in the sale invoice. As such, the provisions of Section 11D of Central Excise Act, 1944 will have no application to the customers. We accordingly set aside the order passed by the Commissioner (Appeals) and restore the order of the original adjudicating authority. The appeal is accordingly allowed.

Summary

Issues Involved: Determination of duty liability u/s 11D of the Central Excise Act, 1944 on the alleged collection of duty amount from buyers despite availing exemption Notification No. 1/93.

Summary:
The appellants were issued a show cause notice for duty demand under Section 11D based on alleged collection of duty amount from buyers despite availing exemption Notification No. 1/93. The Additional Commissioner accepted the appellants' stand that no extra duty was charged from customers, leading to dropping of the demand. However, the Commissioner (Appeals) reversed this decision, confirming the duty demand and imposing a penalty. The main issue was whether the appellants were required to deposit the duty allegedly collected from customers but not paid due to availing the exemption. The Tribunal held that as the invoices did not show any duty amount collected separately, and the duty was already included in the contract value, Section 11D did not apply. The Tribunal referred to a previous case emphasizing that duty must be collected separately to be credited to the Government. As no evidence showed the appellants collected duty separately, the appeal was allowed, setting aside the Commissioner (Appeals) order and restoring the original adjudicating authority's decision.