2013 (12) TMI 751 - AT - Central Excise

Retrospectivity of Provisions - the demand prior to 20.9.1991 covered under the provisions of Section 11D of the Central Excise Act or not Held that - Partial exemption was granted to the manufacturer of sugar who were covered under the notifications The notifications never authorized sugar manufacturer to collect more excise duty and pay less and retain the difference Following Kisan Sahkari Chini Mills Ltd. vs. CCE, Allahabad2005 (3) TMI 124 - SUPREME COURT OF INDIA the incentive granted to the sugar manufacturer does not permit them to collect more duty than what is payable to the Revenue department - the appellants are collective more duty from customers and are paying less with the Central Government. Suppression with intent to evade payment of duty Held that - The appellant filed classification list whereby the appellant claimed concessional rate of duty as per the Incentive Scheme - the corresponding sale bills show collection of higher duty form the customers - it cannot be said that the allegation of suppression with intent to evade payment of duty is not sustainable - the incentive granted to the sugar manufacturers did not permit them to collect more than what they had themselves paid from their customers - If they collected by way of excise duty more than what is dues, then by virtue of Section11D of the Central Excise Act, the assessee is bound to deposit excess amount with the Government - the incentives granted to be Appellants did not permit them to collect, more than what they had themselves paid, from their customers - If they collected by way of excise, more than what they had paid, then by virtue of Section 11D they were bound to deposit that amount with the Government Decided against Assessee.

Summary

Issues:
Common issue involving retrospective application of Section 11D of the Central Excise Act and applicability to Additional Duty of Excise (Goods of Special Importance), suppression with intent to evade payment of duty.

Analysis:
1. Retrospective Application of Section 11D:
The appellants contended that demands made prior to 20.9.1991 are not covered under Section 11D of the Central Excise Act, which was introduced on that date. However, the Tribunal found that the demands were valid as the Show Cause Notice was issued after the introduction of Section 11D. Referring to the decision in Kisan Sahkari Chini Mills Ltd. case, the Tribunal held that the appellants were required to deposit amounts collected from customers post the introduction of Section 11D. Thus, the demand was deemed sustainable under the law.

2. Applicability to Additional Duty of Excise:
The appellants argued that Section 11D does not apply to Additional Duty of Excise (Goods of Special Importance). However, the Tribunal clarified that Section 11D covers any person collecting amounts from buyers as duty, which must be deposited with the Central Government. As the appellants were collecting more duty from customers than paying to the Government, the Tribunal rejected the contention that Section 11D does not apply in this scenario.

3. Suppression with Intent to Evade Payment of Duty:
The Revenue contended that the appellants collected excess duty from customers compared to what was paid to the Revenue, indicating suppression with intent to evade payment of duty. The Tribunal found merit in this argument as the appellants charged higher duty from customers while paying less to the Government. This fact came to light during scrutiny, leading to the conclusion that the allegation of suppression was sustainable. Referring to the Supreme Court decision in Kisan Sahkari Chini Mills Ltd., the Tribunal emphasized that any excess duty collected must be deposited with the Government as per Section 11D.

4. Incentives and Excise Duty Concessions:
The appellants were granted incentives based on a Government order, allowing for excise duty concessions. However, they were found to have charged customers full excise duty while paying only concessional rates to the Government. This discrepancy led to the demands and subsequent legal proceedings. The Tribunal upheld the necessity for the appellants to deposit amounts collected in excess of the duty assessed or determined with the Central Government, as mandated by Section 11D.

In conclusion, the Tribunal dismissed the appeals, citing the applicability of Section 11D to the case, the obligation to deposit excess duty collected, and the unsustainable suppression of facts with intent to evade payment of duty. The decision aligned with legal precedents and upheld the demands made by the Revenue.