2005 (1) TMI 189 - AT - Central Excise

Summary

Issues:
- Entitlement to collect 8% amount from buyer of goods under CENVAT Rule No. 6
- Applicability of Section 11D of the Central Excise Act, 1944

Entitlement to collect 8% amount from buyer of goods under CENVAT Rule No. 6:
The case involved the Respondents clearing goods to M/s. BEML under an exemption without payment of duty, for which they debited 8% of the value of goods under CENVAT Rule No. 6. The Revenue contended that the Respondents were not entitled to collect this 8% amount from M/s. BEML. The Commissioner (Appeals) relied on precedents and allowed the Respondents' appeal, setting aside the original authority's order demanding the 8% amount. During the hearing, both sides presented their arguments, with the Respondents justifying their actions. The Tribunal observed that the 8% amount collected was not considered as duty and that there was no legal provision preventing the collection of this amount from the buyer. It was emphasized that Section 11D of the CE Act, 1944 applies only when duty is collected but not paid to the exchequer. Since the amount collected was not classified as duty, Section 11D did not apply. Consequently, the Tribunal upheld the legality of the Commissioner (Appeals) order, dismissing the Revenue's appeal.

Applicability of Section 11D of the Central Excise Act, 1944:
The crucial issue in this case was the interpretation of Section 11D of the Central Excise Act, 1944 concerning the collection and payment of duty. The Tribunal clarified that Section 11D is triggered when duty is collected but not remitted to the exchequer. In this context, the Tribunal highlighted that the 8% amount debited by the Respondents was not classified as duty. Therefore, the Tribunal concluded that Section 11D did not come into play since the amount collected was not considered duty. By emphasizing the distinction between duty and the 8% amount, the Tribunal reinforced the legality of the Commissioner (Appeals) decision and dismissed the Revenue's appeal. This analysis underscores the importance of accurately categorizing amounts collected in the context of excise duty laws to determine the applicability of statutory provisions like Section 11D.

This detailed judgment from the Appellate Tribunal CESTAT, Bangalore provides a comprehensive analysis of the issues surrounding the entitlement to collect 8% amount under CENVAT Rule No. 6 and the applicability of Section 11D of the Central Excise Act, 1944. The Tribunal's interpretation of these legal provisions, supported by precedents and legal arguments, elucidates the nuances of excise duty regulations and the obligations of parties involved in such transactions.