2009 (12) TMI 468 - AT - Central Excise

Demand - Excess Collection - Adjudicating Authority found that the amount so collected by the buyer giving rise to liability was discharged from cenvat credit account. Such factual position enabled him to construe that Section 11D was against the appellant. Considering averment of assessee, learned Appellate Authority was of the same view and charge framed against the appellant in the show cause notice was upheld. Held that - nothing made out by authorities below that appellant retained amount calling for recovery. Section 11D of Act not invocable in absence of retention of public money.

Summary

Issues:
1. Applicability of Section 11D of the Central Excise Act, 1944 on the levy of central excise duty.

Analysis:
The appellant challenged the order passed by the Commissioner(Appeals) upholding the levy of central excise duty under Section 11D read with Section 11A of the Act. The Adjudicating Authority found that the duty was collected by the appellant on sale tax, considering it as part of the sale price. The appellant contended that the money collected was paid to the Treasury through Cenvat credit account, and no amount was retained for the levy of central excise duty. The Adjudicating Authority and the Appellate Authority upheld the charge framed against the appellant. However, the Tribunal observed that Section 11D was not invokable as there was no retention of the amount by the appellant, and the facts of the case only required a determination of the applicability of Section 11D rather than the modality of duty liability discharge. Consequently, the Tribunal allowed the appeal, holding that Section 11D was not applicable in this case.

The appellant argued that the duty collected on the sale tax element included in the assessable value was discharged through the Cenvat credit account and not retained by the appellant for the levy of central excise duty. On the other hand, the JDR contended that the duty collected on the sale tax element should be deposited to the Treasury as per Section 11D of the Act. The Tribunal, after hearing both sides and examining the records, found that there was no retention of the public money by the appellant, making Section 11D inapplicable. The Tribunal emphasized that the case required a determination of the applicability of Section 11D based on the facts and circumstances, rather than focusing on the discharge modality of duty liability. Therefore, the Tribunal allowed the appeal, stating that Section 11D was not invokable in this scenario.

In conclusion, the Tribunal held that Section 11D of the Central Excise Act, 1944 was not applicable in the case as there was no retention of the amount by the appellant for the levy of central excise duty. The Tribunal emphasized that the case only required a determination of the applicability of Section 11D based on the factual position, rather than delving into the discharge modality of duty liability. As a result, the Tribunal allowed the appeal, providing consequential relief to the appellant in accordance with the law.