2018 (10) TMI 692 - AT - Central Excise

Excess amount collected in the name of Central Excise duty - section 11D(1) and (1A) of the Central Excise Act, 1944 - case of assessee is that since they are not liable to pay duty on the goods sold by them, the provisions of section 11D of Central Excise Act, 1944 are not applicable in their case for a period prior to 10.5.2008 and also that the excess amount collected by them in the name of Central Excise duty has already been returned back by them to their customers - time limitation. Held that - It can be seen that section 11D(i) as it existed prior to 10.5.2008 provided that any person who is liable to pay duty under the Central Excise Act or rules, made thereunder need to pay back the excess amount collected by them, thus it appears on plain reading that it primarily covers the producer or manufacturer of excisable goods or the person storing such goods in a warehouse who pays the duty on excisable goods at the time of removal of such goods - contention of the assessee that they are not covered by the provisions of section 11D for a period prior to 10.5.2008, is not acceptable, since the depot of manufacturer assessee who is M/s. Hindustan Petroleum Corpn. Ltd. in this case, is only an extension of the manufacturer and therefore, the provisions of section 11D are very much applicable on the extended arm of the manufacturer assessee, i.e. the depot of such assessee - provisions of section 11D even prior to 10.5.2008 are applicable in case of appellant assessee and they are legally bound to deposit back the excess amount collected by them from their customers in the name of Central Excise duty. Another case of assessee is that they have returned back the excess amount collected in the name of Central Excise duty from their customers and therefore, provisions of section 11D are not relevant to demand the same amount from them - Held that - A perusal of the credit note makes it clear that a credit of cenvat difference has been given back by them for a period April to June, 2009. But it is not a refund of excess amount collected by them rather for lack of evidence the possibility cannot be ruled out that buyer may have taken the credit of these cenvat difference in their books of accounts and might have used them for further passing the cenvat credit to their customers - it is not a proper return of the excess collected amount which was in the name of Central Excise duty. Time Limitation - Held that - A plain reading of section 11D makes it evidently clear that no period of limitation has been prescribed under this particular section - in the present case, demand is purely and only under section 11D of the Central Excise Act wherein the law does not provide any period of limitation - demand not barred by limitation of time. Appeal dismissed - decided against appellant.

Issues:
1. Applicability of Section 11D of the Central Excise Act, 1944 to a depot of a manufacturer.
2. Whether the excess amount collected in the name of Central Excise duty needs to be deposited with the Central Government.
3. The impact of returning excess amount to customers in the form of credit notes.
4. The effect of the period of limitation on the demand under Section 11D.

Analysis:

Issue 1: Applicability of Section 11D to a depot of a manufacturer
The Tribunal analyzed the provisions of Section 11D of the Central Excise Act, both before and after the amendment on 10.5.2008. The Tribunal held that the depot of the manufacturer, even if not directly liable to pay duty, is an extension of the manufacturer and thus falls within the ambit of Section 11D. The definition of "place of removal" under Section 4 of the Act includes a depot from where excisable goods are to be sold after clearance from the factory. Therefore, the Tribunal concluded that the provisions of Section 11D are applicable to the depot of the manufacturer.

Issue 2: Deposit of excess amount collected in the name of Central Excise duty
The Tribunal rejected the argument that excess amount collected had been returned to customers through credit notes. It emphasized that the credit notes issued did not constitute a proper return of the excess collected amount. The Tribunal held that the excess amount collected in the name of Central Excise duty must be deposited with the Central Government, as per the requirements of Section 11D.

Issue 3: Impact of returning excess amount to customers
The Tribunal scrutinized the credit notes provided by the appellant and determined that the credit given was not a refund of the excess amount collected but rather a credit of cenvat difference. It concluded that the excess amount collected had not been effectively returned to customers and therefore needed to be deposited with the Central Government.

Issue 4: Period of limitation on the demand under Section 11D
The Tribunal addressed the argument regarding the period of limitation on the demand under Section 11D. It clarified that Section 11D does not prescribe a specific period of limitation. Referring to a case law, the Tribunal explained that the demand under Section 11D is not subject to the period of limitation prescribed under Section 11A. Consequently, the Tribunal upheld the demand of the excess amount collected in the name of Central Excise duty under Section 11D, finding it legally valid and dismissing the appeal.

This comprehensive analysis of the issues involved in the judgment provides a detailed understanding of the Tribunal's decision and the legal principles applied in the case.

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