2012 (3) TMI 158 - AT - Central Excise

Dispute of quantification - SSI Exemption - Held that - Excise duty actually paid at the time of clearance of goods from the factory, in terms of Notification No.175/86 is not required to be included in the total demand, in as much as that already stands paid by the appellants. Once they cross the nil rate of duty slabs and start paying concessional rate of duty under the second slab, the entire clearances thereafter have to be treated as having been cleared on payment of concessional rate. Similarly after crossing the final slab requiring the appellants to pay full rate of duty, the clearances affected thereafter are required to be considered as having been made on full rate of duty. - set aside the impugned order and remand the matter to Commissioner for correctly quantifying the demand of duty.

Summary

Issues:
Quantification of excise duty demand based on Notification No.175/86 and Section 11D of Central Excise Act, 1944.

Analysis:
The judgment by the Appellate Tribunal CESTAT, New Delhi involved a case where a demand of approximately Rs. 55 lakhs was confirmed against the appellants engaged in manufacturing Elastic Rail Clips. The appellants, benefiting from an exemption under Notification No.175/86, were collecting the full amount of duty from the Railways, the purchasers of the clips, despite availing concessional rates under the notification. The Revenue proposed to confirm the duty collected by the appellants from the Railways, invoking Section 11D of the Central Excise Act, 1944. The Commissioner confirmed the duty not paid to the department by the appellants.

The appellants agreed that under Section 11D, duty collected but not paid to the Revenue at the time of clearance should be deposited. They argued that the total duty collected from the Railways should consider the duty actually paid by them under Notification No.175/86, which was not raised before the Commissioner. The Revenue contended that no evidence of duty payment was produced by the appellants.

The Tribunal found no dispute regarding the appellants' liability to pay excess duty collected but not deposited. The disagreement was about quantifying the demand. It was acknowledged that evidence of duty payment was not presented before the lower Adjudicating Authority. The Tribunal remanded the matter to the Commissioner for accurate quantification of the duty demand, considering the duty paid by the appellants under the notification.

The appellants were granted the opportunity to present submissions regarding penalty before the Adjudicating Authority during the remand process. The Tribunal emphasized the need for proper quantification of the demand based on the duty paid by the appellants under the notification, which was not considered during the initial proceedings. The case highlighted the importance of providing relevant evidence and arguments at the appropriate stages of legal proceedings to support claims and defenses effectively.