2006 (11) TMI 43 - AT - Central Excise

Demand- Respondent is manufacturer of exempted goods and were availing the benefit of modvat credit in respect of common inputs Assessee charged excise duty in addition to price Such amount of excise duty recoverable under Section 11D ibid

Summary

Issues:
- Appeal against the impugned order setting aside demand under Section 11D of the Central Excise Act, 1944.

Analysis:
The Appellate Tribunal noted that the Respondent did not appear during the proceedings, with postal remarks indicating the "factory closed." The Revenue had appealed against the order that favored the Respondent, setting aside the demand under Section 11D of the Central Excise Act, 1944. The Respondent was engaged in manufacturing goods subject to excise duty and availing MODVAT credit for common inputs. Upon clearance of goods, the Respondent would reverse credit equal to 8% of the value of goods cleared without duty payment, while collecting excise duty at an 8% rate separately in invoices. The Revenue contended that the excise duty collected from customers was undisputed, justifying the demand.

The Commissioner (Appeals) had previously held that the 8% amount collected from customers constituted part of the goods' price, paid under Rule 57CC of the Central Excise Rules, 1944 by the Respondent. This ruling implied no violation of Section 11D of the Central Excise Act. The invoices provided in the order explicitly stated the excise duty amount, separate from the goods' price, which were not subject to excise duty. Consequently, the amount collected as excise duty and shown separately was deemed recoverable under Section 11D. Therefore, the Appellate Tribunal set aside the impugned order, reinstating the original order and allowing the Revenue's appeal.