2015 (5) TMI 736 - AT - Central Excise

Duty demand u/s 11D - Whether provisions of Section 11D of Central Excise Act, 1944 would apply to the impugned goods, which were cleared at nil rate of duty after the respondent-assessee reversed 8% of total price of such goods cleared during the period from 1.3.2003 to 31.5.2004 - Held that - However, after decision of Larger Bench of the Tribunal in the case of Unison Metals Ltd. (2006 (10) TMI 171 - CESTAT, NEW DELHI), the Board has examined the circular and clarified that in the case of payment made under erstwhile Rule 57CC(1) corresponding to Rule 6(3) of Cenvat Credit Rules, 2004, Section 11D of the Act is not applicable since the amount of 8% or 10% has already been paid to the Revenue and no amount is retained by the assessee. It was also stated by the Board that this decision has been accepted. At this stage, learned A.R. submitted that the customers might have taken credit of duty paid. However, there is no evidence to show such is the case and this is not a ground also and this cannot be a ground even after the Board s Circular. In view of above, appeal filed by the Revenue is devoid of merits and is rejected - Decided against Revenue.

Summary

Issues involved:
1. Applicability of Section 11D of Central Excise Act, 1944 to goods cleared at nil rate of duty after the assessee reversed 8% of total price during a specific period.

Analysis:
The central issue in this case revolved around the interpretation and application of Section 11D of the Central Excise Act, 1944 to goods cleared at nil rate of duty after the assessee reversed 8% of the total price during a specific period. The impugned order contended that once the assessee collected the 8% amount from customers, it had to be paid to the Government account as per the provisions of Section 11D.

The respondent, relying on a previous Tribunal decision in the case of Unison Metals Ltd. vs. C.C.E., Ahmedabad-I, argued that they were entitled to collect the 8% amount. However, the Tribunal considered the submissions from both sides and referred to Circular No. 599/36/2001-CX dated 12.11.2001 issued by the Board. The circular clarified that when the 8% amount is separately shown on the invoice and not as excise duty, Section 11D would not be attracted. It emphasized that if any amount representing an excise duty is recovered from the buyer, Section 11D would be applicable based on factual evidence from documents.

Furthermore, the Tribunal highlighted that after the decision of a Larger Bench in the Unison Metals Ltd. case, the Board examined the circular and clarified that in cases where payment was made under the relevant rules, Section 11D would not be applicable as the duty amount had already been paid to the Revenue without retention by the assessee. The Tribunal rejected the Revenue's appeal, noting that there was no evidence to show that customers had taken credit of the duty paid, and this could not be a valid ground even after the Board's clarification. Consequently, the appeal by the Revenue was deemed meritless, and the Cross Objection by the respondent-assessee was disposed of accordingly.