2010 (5) TMI 866 - AT - Central Excise

Summary

Issues Involved:
1. Applicability of Sec.11D(1) of the Central Excise Act to imported, customs duty-paid goods.
2. Interpretation of Sec.11D(1) of the Central Excise Act and Sec.28B of the Customs Act.
3. Liability of the appellant to pay duty on non-excisable goods.
4. Collection and crediting of excise duty amounts by the appellant.

Summary:

1. Applicability of Sec.11D(1) of the Central Excise Act to imported, customs duty-paid goods:
The central issue is whether imported, customs duty-paid goods fall under the definition of "excisable goods" u/s 11D(1) of the Central Excise Act. The Tribunal noted that the definition of "excisable goods" u/s 2(d) of the Central Excise Act includes goods specified in the schedules to the Central Excise Tariff Act (CETA) as being subject to a duty of excise. The Tribunal observed that the goods in question, despite being imported and customs duty-paid, are still listed in the CETA schedules and thus qualify as "excisable goods." This interpretation aligns with the judgments in Wallace Flour Mills Company Ltd. vs Collector of Central Excise and Hind Rubber Factory vs. Union of India.

2. Interpretation of Sec.11D(1) of the Central Excise Act and Sec.28B of the Customs Act:
The appellant argued that the show-cause notices only invoked Sec.11D of the Central Excise Act, but the Commissioner, in de novo adjudication, also invoked Sec.28B of the Customs Act, which was beyond the scope of the notices. The Tribunal noted that Sec.11D(1) requires any person who collects an amount representing duty of excise from the buyer to pay it to the Central Government, regardless of whether the goods are excisable or not. The Tribunal found that the Commissioner's invocation of Sec.28B was not justified as it was not part of the original show-cause notices.

3. Liability of the appellant to pay duty on non-excisable goods:
The appellant contended that the goods cleared were not excisable as they were not subjected to any manufacturing process and thus Sec.11D(1) was not applicable. The Tribunal, however, held that the goods, being listed in the CETA schedules, are considered excisable goods regardless of whether they underwent manufacturing. The Tribunal emphasized that the definition of "excisable goods" does not necessitate actual levy of duty but includes goods liable to duty.

4. Collection and crediting of excise duty amounts by the appellant:
The appellant argued that no amount representing duty of excise was collected from their dealers, even though such amounts were mentioned in the invoices. They also claimed that any duty collected was deposited into the Oil Pool Account under the APM scheme. The Tribunal noted that mentioning duty amounts in invoices implies collection of such amounts, and under Sec.11D(1), these amounts must be credited to the Central Government. The Tribunal rejected the appellant's argument that the duty collected was deposited into the Oil Pool Account, stating that this does not exempt them from the obligation u/s 11D(1).

Conclusion:
The Tribunal directed the Registry to place the records before the Hon'ble President to constitute a Larger Bench to resolve the conflict regarding the applicability of Sec.11D(1) to imported, customs duty-paid goods falling under the CETA schedules.