2007 (6) TMI 210 - AT - Central Excise

Appellants cleared M.S. billets from their Steel Plant at Durgapur to the Depot from where according to orders placed by the purchasers they got the billets converted to tor steel at the hand of job workers - allegation that appellants have recovered more duty from the purchasers of tor steel than the duty paid to the exchequer by the job workers held that to assessee duty liability u/s 11D, duty paid on billets at Durgapur & that paid by job worker on Tor Steel have to be considered

Summary

Issues: Duty demand under Section 11D for recovery of excess duty collected from customers, liability of Depot of SAIL as a manufacturer, applicability of Section 11D to the appellants, determination of excess duty recovery by considering duty paid at two stages.

Analysis:
1. Duty Demand under Section 11D: The Department alleged that the appellants recovered more duty from purchasers of tor steel than the duty paid by job workers, resulting in a duty demand of Rs. 2,40,76,218. The appellant argued that the total duty paid was recovered from customers, with a short collection of Rs. 1,66,119. The Tribunal noted that for a specific period, no excise duty was recovered, and for subsequent periods, the appellants claimed to have recovered only the total duty paid. The Tribunal found discrepancies in the calculation of excess duty and remanded the matter for further examination.

2. Liability of Depot of SAIL: The appellant contended that the Depot of SAIL at Guwahati, where tor steel was converted, was not a manufacturer and thus not liable to pay duty. The Department argued that the appellants, as owners of the goods during conversion, should be deemed manufacturers. The Tribunal considered previous decisions but emphasized the need to assess duty payment at both stages to determine liability accurately.

3. Applicability of Section 11D: The Department asserted that any amount collected above the compounded levy on tor steel by job workers should be recoverable from the appellants under Section 11D. The appellants maintained that they acted as facilitators and only recovered the total duty paid. The Tribunal acknowledged the conflicting positions and directed a reevaluation by considering duty paid on billets and tor steel to ascertain any excess recovery from customers.

4. Determination of Excess Duty Recovery: The Tribunal emphasized the importance of considering duty paid at both stages - billets and tor steel - to determine if any excess duty was recovered from customers. The Adjudicating Commissioner's failure to account for duty paid at both stages led to the remand of the case for a comprehensive assessment. The Tribunal instructed a thorough review, including all evidence related to duty payments on the impugned consignments, before making a final decision.

In conclusion, the Tribunal allowed the appeal by way of remand, highlighting the necessity of a detailed examination of duty payments at different stages to accurately determine any excess duty recovery from customers. The judgment underscored the importance of a thorough assessment in cases involving duty demands under Section 11D and the liability of parties involved in the manufacturing and supply chain process.