1999 (9) TMI 294 - AT - Central Excise

Summary

Issues involved:
The issues involved in the judgment are the applicability of Section 11D of the Act to the appellant's case regarding the recovery of duty on post manufacturing expenses, and the contention raised by the appellant regarding the collection of duty from customers and the bar of limitation.

Applicability of Section 11D:
The appellant had filed a price list indicating deductions for post manufacturing expenses, resulting in a higher assessable value than declared. The Jurisdictional Superintendent informed the appellant to pay the duty amount not remitted to the Government u/s 11D. The Collector (Appeals) upheld the liability, leading to the appeal. The appellant argued that it did not collect duty from customers, and the demand was time-barred citing a Madras High Court judgment. The department contended that accepting the appellant's stance would nullify Section 11D.

Interpretation of Section 11D:
Section 11D, introduced in 1991, aims to prevent unjust enrichment by manufacturers retaining excess duty passed on to buyers. The duty burden is shifted to buyers ultimately. The Act prohibits refund of duty passed on to buyers, directing it to a customer welfare fund. The appellant did not collect duty separately from customers, and the money recovered did not change despite an increased assessable value. The Tribunal found the appellant did not collect duty representing amounts not passed to the Government, thus Section 11D did not apply.

Conclusion:
The Tribunal allowed the appeal, setting aside the impugned order, as it determined that Section 11D did not apply in the appellant's case. The judgment did not delve into the arguments on limitation, as the main issue was the non-applicability of Section 11D based on the interpretation of duty collection from customers.