2006 (6) TMI 289 - AT - Central Excise

Summary

Issues:
- Interpretation of Section 11D of the Central Excise Act, 1944 regarding demand for payment of excise duty collected from buyers under Rule 57CC/57AD.
- Applicability of Section 11D when the amount collected has already been paid to the Government.
- Conflict in judicial decisions on whether the amount collected from buyers represents excise duty and triggers Section 11D.

Analysis:

Issue 1: Interpretation of Section 11D
The case involves goods cleared under exemption notifications where appellants pay 8% of the sale price as per Rule 57CC/57AD. The Revenue contends that this 8% collected from buyers is excise duty and should be paid under Section 11D. The appellants argue that since the amount has been paid to the Government, Section 11D is not applicable. They rely on precedents like Nu-Wave Shoes v. CCE and Mafatlal Industries Ltd. v. UOI to support their position.

Issue 2: Applicability of Section 11D
The appellants assert that all conditions for invoking Section 11D are not met as they have paid the amount to the Government and do not retain it. They highlight that Rule 57CC does not prohibit collecting from customers and cite Circulars and judicial decisions to support their stance. They argue that Section 11D applies when duty is collected but not paid to the exchequer, which is not the case here.

Issue 3: Conflict in Judicial Decisions
The case presents conflicting views from different judicial decisions on whether the amount collected represents excise duty triggering Section 11D. The appellants cite cases like CCE v. Perfect Refractories to argue that since they are exempted from duty, the collection does not represent excise duty. On the other hand, the Revenue relies on cases like Vimal Moulders (I) Ltd. v. CCE to support their position.

Conclusion:
Given the conflicting interpretations and the importance of the issue, the Tribunal decides to refer the matter to a Larger Bench to resolve the question of whether the amount collected under Rule 57CC/57AD from buyers attracts the provisions of Section 11D of the Central Excise Act, 1944. This decision aims to address the inconsistency in judicial opinions and provide clarity on the application of Section 11D in similar cases.