2006 (5) TMI 430 - AT - Central Excise

Summary

Issues:
Appeal against OIA No. 14/2005 dated 31-1-2005 passed by the Commissioner of Customs & Central Excise (Appeals), Hyderabad regarding collection of 8% amount under Section 11D of the Central Excise Act, 1944.

Analysis:
The case involved the appellant clearing goods to M/s. Bharat Earth Movers Limited (BEML) by availing exemption under Notification No. 63/95-C.E., dated 16-3-1995 without payment of duty. The appellant had taken Modvat credit on inputs and paid 8% of the value of the goods under CENVAT Rule No. 6, which was reimbursed by BEML. The Revenue initiated proceedings against the appellant, arguing that they were not entitled to collect 8% from BEML. The dispute centered around whether the appellant could collect this amount and if Section 11D of the Central Excise Act, 1944 was applicable in this scenario.

During the proceedings, the learned Consultant for the appellant referred to a previous order by the same Bench in identical circumstances, stating that the ratio of the previous order would be applicable in this case. The learned JDR for the Revenue reiterated the grounds of appeal, leading to a detailed examination of the case records by the Tribunal.

Upon careful consideration, the Tribunal noted that in the previous order, it was held that the appellant had correctly debited 8% of the sale value of the exempted goods supplied to BEML, clarifying that this amount was not considered as duty. The Tribunal emphasized that Section 11D of the CE Act, 1944 would only be triggered when duty is collected but not paid to the exchequer. Since the amount collected was not classified as duty, Section 11D was deemed inapplicable. Consequently, the Tribunal upheld the Order-in-Appeal (OIA) and dismissed the Revenue's appeal, following the same ratio as the previous order.

In conclusion, the Tribunal upheld the OIA, emphasizing that the appellant was entitled to collect the 8% amount from BEML and that Section 11D of the Central Excise Act, 1944 did not apply in this context. The decision was pronounced in open court at the conclusion of the hearing.