2002 (6) TMI 62 - AT - Central Excise

Summary

Issues:
1. Recovery of Additional Excise Duty (AED) collected but not paid.
2. Interpretation of Section 11D and related provisions.
3. Applicability of AED on 'Dipped Fabrics' and implications of Notification 11/98-C.E.
4. Adjustment of amounts under Section 11D(4) and (5).
5. Applicability of Section 3(3) of the Additional Excise Duty Act, 1957.
6. Plea of limitation and eligibility of Modvat credit of AED.

Analysis:

1. The case involved the recovery of Additional Excise Duty (AED) collected but not paid by the appellant during a specific period. The Commissioner ordered the demand of the amount along with interest and penalties, leading to the present appeal against this order.

2. The Tribunal analyzed the provisions of Section 11D and related sections to determine the liability of the appellant. It was observed that failure to pay amounts collected in excess of duty from the buyer does not constitute short payment or non-payment of duty. The Tribunal referred to a previous decision and concluded that the appellant could only be directed to pay such collected amounts under Section 11D, and penalties or interest under other sections were not applicable in this case.

3. Regarding the AED on 'Dipped Fabrics', the Tribunal considered the implications of Notification 11/98-C.E. which exempted AED if the base fabrics had paid AED and no Modvat credit was availed. The Tribunal noted that the duty paid on inputs and recovered from the buyer was related to the inputs and not the final 'Dipped Fabrics', thus questioning the demand made by the Commissioner.

4. The Tribunal examined the provisions of Section 11D(4) and (5) concerning the adjustment of amounts on finalization of duty payable on the 'Dipped Fabrics'. It was concluded that these provisions could not be applied as the AED on 'Dipped Fabrics' was 'NIL' as per the applicable notification.

5. The appellant argued that Section 11D was not applicable to AED due to Section 3(3) of the Additional Excise Duty Act, 1957. The Tribunal acknowledged this argument based on a previous court decision, highlighting the need for specific provisions regarding appropriation of amounts.

6. The Tribunal addressed the plea of limitation and the eligibility of Modvat credit of AED, leaving the issue open for the appellant to pursue with the proper officer, as it had not been considered by the lower authorities. No findings were made on these aspects.

In conclusion, the Tribunal set aside the Commissioner's order and allowed the appeal based on the detailed analysis and interpretation of the relevant legal provisions and notifications.