2004 (3) TMI 675 - AT - Central Excise

Summary

Issues involved:
1. Whether the excise duty collected by the appellant from customers is liable to be recovered under Section 11D of the Central Excise Act.

Analysis:
The appeal in question pertains to M/s. Pratappur Sugar Industries Ltd. and revolves around the issue of whether the excise duty collected by them from customers is subject to recovery under Section 11D of the Central Excise Act. The appellant's argument, presented by Shri S.P. Ojha, emphasizes the incentive scheme announced by the Ministry of Food & Civil Supplies, providing concessions for excise duty payment on free sale sugar. It is contended that the duty collected was in accordance with the concessional rate specified under Notification Nos. 130/83 and 131/83, issued as part of the incentive scheme. The appellant relies on the principle that interpretations of taxing statutes should align with the scheme's objectives, citing the Supreme Court's decision in Belapur Sugar and Allied Industries Ltd. v. C.C.E., Aurangabad. Additionally, it is highlighted that surplus funds generated were intended for loan repayment, negating any undue enrichment. However, Mrs. Neeta Lal Butalia, representing the respondent, counters this argument by referencing a previous decision of the Appellate Tribunal in the case of Kishan Sahakari Chini Mills Ltd., which ruled in favor of depositing additional duty under Section 11D when excise duty equal to the free sale sugar rate was collected.

Upon reviewing the submissions, the Tribunal, led by Member (T) V.K. Agrawal, delves into the provisions of Section 11D of the Central Excise Act. It is noted that the section mandates the immediate payment of any amount collected in excess of the assessed duty on excisable goods to the Central Government. The Tribunal observes that although the duty was paid at a concessional rate to the government, the appellant collected duty from customers at the higher rate applicable to free sale sugar, triggering the application of Section 11D. The Tribunal underscores that the non obstante clause at the beginning of Section 11D supersedes any contrary provisions, thus disallowing the appellant's argument that the incentive was meant for loan repayment. Referring to the precedent set in the Kisan Sahakari Chini Mills Ltd. case, the Tribunal affirms that no entity is authorized to retain excise duty collected and must promptly deposit such amounts with the government. Consequently, the appeal filed by the appellants is dismissed based on the application of Section 11D and the established legal interpretation.

This detailed analysis of the judgment thoroughly addresses the legal nuances and arguments presented by both parties, culminating in the Tribunal's decision to reject the appellant's appeal based on the provisions of Section 11D and relevant legal precedents.