2003 (1) TMI 210 - AT - Central Excise

Summary

Issues involved:
Interpretation of Rule 57CC of Central Excise Rules, 1944 in relation to the payment of duty and applicability of Section 11D.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Chennai involved a dispute regarding the treatment of amounts reversed under Rule 57CC of the Central Excise Rules, 1944. The ld. Commissioner (Appeals) had held that the reversed amount is not considered as duty, thus Section 11D provisions do not apply, and set aside the lower authority's order demanding duty from the respondent/assessee.

The Revenue contended that the amount collected was Central Excise duty, evidenced by invoices, and therefore Section 11D should apply. They argued that the Circular and provisions of Rule 57CC cited by the Commissioner were irrelevant to the case.

The ld. DR reiterated the grounds of appeal, emphasizing that any amount collected as duty must be paid to the department under Section 11D, seeking to set aside the Commissioner's order and restore the Order-in-Original passed by the Assistant Commissioner.

On behalf of the Respondent, the consultant highlighted the findings in the impugned order, emphasizing the distinction between duty and the amount reversed under Rule 57CC. The consultant argued that the reversed amount was not duty, as clarified by the Ministry of Finance, and therefore, Section 11D should not be applicable.

The ld. Commissioner (Appeals) analyzed the case in detail, referring to the provisions of Rule 57CC which require manufacturers to pay a specified amount under certain circumstances. The Commissioner noted that the rule does not refer to the payment as 'duty,' and cited a Board's letter supporting the view that the reversed amount is not considered duty, thus customers cannot claim Modvat credit. Consequently, the Commissioner upheld the appeal of the respondent/assessee, as the reversed amount was not classified as duty under Rule 57CC.

In conclusion, the Tribunal upheld the decision of the ld. Commissioner (Appeals), stating that since the reversed amount under Rule 57CC was not considered duty, Section 11D provisions did not apply. The Tribunal rejected the Revenue's appeal, affirming the decision of the Commissioner.