2008 (4) TMI 572 - AT - Central Excise

Summary

Issues:
- Applicability of Section 11D of the Central Excise Act
- Interpretation of "in any manner" in Section 11D
- Entitlement to abatement of duty under Section 4(4)(d)(ii) of the Act

Analysis:

1. Applicability of Section 11D of the Central Excise Act:
The case involved the appellants selling cotton yarn through consignment agents who collected duty from buyers at a higher rate than paid by the appellants to the government. The department raised a demand under Section 11D, requiring the appellants to pay the excess duty collected by the consignment agents. The contention was made that Section 11D might not apply since the appellants did not directly collect excess duty from buyers. However, the Tribunal clarified that the provision covers any amount collected in excess of the duty on excisable goods, whether collected directly or through intermediaries like consignment agents. The aim is to prevent unjust enrichment, and in this case, the excess amount collected indirectly by the appellants fell within the scope of Section 11D.

2. Interpretation of "in any manner" in Section 11D:
The Tribunal emphasized that the phrase "in any manner" used in Section 11D is crucial, as it signifies that excess duty collected from buyers, even indirectly through intermediaries, must be paid to the government. This interpretation ensures that those liable to pay duty do not benefit from unauthorized collections. Therefore, the appellants' indirect collection of excess duty through consignment agents was deemed to be covered by the provision, reinforcing the obligation to deposit such amounts with the Central Government.

3. Entitlement to abatement of duty under Section 4(4)(d)(ii) of the Act:
The appellants attempted to argue for an abatement of duty under Section 4(4)(d)(ii) to reduce the amount payable under Section 11D. However, the Tribunal rejected this plea, stating that the provisions of Section 4(4)(d)(ii) were irrelevant to a demand under Section 11D. The Tribunal found no merit in the appellants' case and dismissed the appeal, upholding the impugned order that confirmed the demand against the appellants under Section 11D of the Central Excise Act.

In conclusion, the Tribunal's judgment clarified the application of Section 11D, the interpretation of "in any manner," and rejected the plea for abatement of duty under Section 4(4)(d)(ii). The decision emphasized the obligation to deposit excess duty collected from buyers, whether directly or indirectly, with the Central Government to prevent unjust enrichment and ensure compliance with excise duty regulations.