2007 (6) TMI 374 - AT - Central Excise

Summary

Issues: Recovery of excess Central Excise Duty from manufacturer and third party, compliance with Section 11D and 11A of Central Excise Act, liability of parties in duty recovery process.

Analysis:
1. Recovery of Central Excise Duty: The appellant, a P.S.C. pipes manufacturer, sold goods to M/s. Subhash Project and Marketing Ltd. The issue arose when a show cause notice alleged that M/s. Subhash Project and Marketing Ltd. collected excess duty, leading to a demand for recovery under Section 11D. The adjudication ordered the recovery of the excess amount from M/s. Subhash Project and Marketing Ltd. based on the Central Excise Act provisions.

2. Appeals and Compliance: Both parties appealed to the Commissioner (Appeals), who directed pre-deposit of the duty amount. However, non-compliance by M/s. Subhash Project and Marketing Ltd. led to the dismissal of their appeal. The appellant's appeal, on the other hand, was based on the argument that they had not collected any duty amount and thus had no liability under Section 11D. The adjudicating authority only ordered recovery from the appellant through M/s. Indian Hume Pipes Co. Ltd.

3. Legal Liability and Recovery: The appellant contended that since they were not liable for the duty collection, no order should have been passed against them. They argued that the responsibility for recovery should not be imposed on strangers, as the Central Excise Act and Rules provide clear provisions for duty liability and recovery. The Tribunal agreed with the appellant, emphasizing that Section 11 of the Act does not allow recovery through third parties and that diffusing liabilities is impermissible.

In conclusion, the Tribunal allowed the appeal by setting aside the direction concerning the appellant in the impugned order, highlighting the importance of adhering to the legal provisions for duty recovery and avoiding the imposition of responsibilities on parties not directly liable under the Central Excise Act.