2009 (2) TMI 655 - AT - Central Excise

Summary

Issues involved: Interpretation of Section 11D of Central Excise Act, 1944 regarding payment on exempted goods and applicability of Circular No. 870/8/2008-CX.

The appellant did not maintain separate accounts for dutiable and exempted goods as required by Rule 57CC of Central Excise Rules, 1944, leading to payment of 8% of price of exempted goods at clearance. The department demanded duty of Rs. 13,30,200/- and a penalty of Rs. 5 lakhs, contending that the amount collected from buyers as excise duty should be deposited under Section 11D of Central Excise Act, 1944.

The appeal focused on the applicability of Section 11D in relation to the 8% or 10% payment on exempted goods as per Central Excise Rules. Previous decisions indicated that Section 11D may not apply if the amount collected is deposited with the Government. The Commissioner (Appeals) upheld the duty and penalty based on Circular No. 870/8/2008-CX, stating that the appellants did not comply with the requirement to show the amount paid under Rule 6 of the Cenvat Credit Rules, 2004 in the invoices. The Tribunal observed that the case pertained to 2001-2002, questioning how the appellants could have followed instructions issued in 2008 for clearances made years earlier. Consequently, the appeal was allowed, granting relief to the appellants.