2004 (7) TMI 161 - AT - Central Excise

Summary

Issues: Interpretation of Section 11D of the Central Excise Act regarding the liability to pay duty on excisable goods collected from customers.

In this case, the appellants argued that they should not be asked to pay an amount collected from customers as duty under Section 11D of the Central Excise Act because the adjudicating authority had found that the goods were chargeable to nil rate of duty. They contended that since there was no duty liability, the amount collected should not be recovered under Section 11D. They relied on a previous decision and emphasized that Section 11D applies only to duty on final end-products. On the other hand, the Revenue argued that Section 11D applies to anyone who collects an amount in excess of the duty assessed or determined on excisable goods, regardless of whether duty is ultimately payable. The Revenue pointed out that the appellants had collected duty when it was not payable and issued double invoices, and therefore, they were obligated to pay the excess amount collected to the Central Government.

The Tribunal analyzed Section 11D, which requires any person liable to pay duty under the Central Excise Act and who has collected an amount in excess of the duty assessed on excisable goods to pay that amount to the Central Government. The Tribunal noted that even though the duty assessed on the goods was nil due to a subsequent classification change, the appellants had collected an extra amount from customers as duty. Therefore, the Tribunal held that the appellants were liable to pay this sum to the Central Government, upholding the order of the Commissioner and rejecting the appeal.