2009 (7) TMI 1110 - AT - Central Excise

Summary

Issues:
Demand of Excise Duty on Sulphuric Acid clearance under Notification No. 6/2002-C.E.
Interpretation of Section 11D of the Central Excise Act, 1944 regarding recovery of amounts collected but not paid to the Government.

Analysis:
The judgment by the Appellate Tribunal CESTAT Bangalore dealt with the demand of Rs. 2,06,137/- towards Excise Duty on the clearance of Sulphuric Acid under Notification No. 6/2002-C.E. The appellants had used common inputs for manufacturing both dutiable and exempted final products. They had reversed 8% of the sale price of the exempted Sulphuric Acid as per Rule 6(3)(b) of Cenvat Credit Rules, 2002. The Original Authority demanded the duty under Section 11D of the Act, which allows recovery of amounts collected by the assessee but not paid to the Government. The appeal sought to vacate this demand, claiming that the amount was not realized from the customer, FACT, despite being recorded in their books as outstanding.

The learned counsel for the appellants argued that Section 11D requires the amount to be recoverable only if it has been realized from the customer and not paid to the Government. The Tribunal, after considering the submissions, agreed with the appellants. Section 11D mandates that any amount collected in excess of the duty assessed on excisable goods must be paid to the Central Government. As the impugned amount was shown as outstanding but not received by the appellants, the demand was deemed unsustainable. Consequently, the Tribunal decided to remit the case to the Original Authority for fresh consideration after hearing the appellants. The appellants were directed to provide evidence that they did not charge the amount from FACT.

In conclusion, the Tribunal allowed the appeal by way of remand, emphasizing the necessity for the appellants to demonstrate that the impugned amount was not realized from the customer. The decision highlighted the importance of complying with Section 11D in excise duty matters and the need for proper verification of amounts collected and paid to the Government.