2017 (2) TMI 1169 - AT - Central Excise

Manufacture - drawing of wire whether amounts to manufacture or not? - recovery u/s 11D - Held that - From the plain reading of the Section 11D, the amount u/s 11D can be recovered only in a case where the assessee collected any amount in excess of duty assessed or determined and paid on any excisable goods from the buyer of such goods, in any manner, as regards duty of excise. Therefore, even if any excise duty the assessee collected from the buyers of the goods and if the same has been paid to the Government s account, Section 11D has no application - In the present case, the duty was assessed by the respondent and the same was paid to the Govt. account. Therefore, no amount remained to be paid to attract Section 11D - appeal dismissed - decided against Revenue.

Summary

Issues:
- Whether the appellant's activity of drawing wire rods amounts to excisable activity.
- Whether the appellant was liable to pay excise duty on the drawn wire.
- Whether the demand of duty under Section 11D of the Central Excise Act, 1944 is applicable in this case.
- Whether the amount collected by the appellant from customers was required to be credited to the Government's account under Section 11D.

Analysis:
1. The appellant is engaged in manufacturing thinner wire from thicker wire through the process of drawing wire rods and availing CENVAT Credit on the input. The department argued that at the relevant time, wire drawing did not amount to manufacture, making the appellant's activity non-excisable. The adjudicating authority confirmed the demand of duty under Section 11D, which requires any amount collected in excess of the duty assessed to be paid to the Central Government. The Commissioner (Appeals) set aside the order, stating that the appellant had paid the duty collected to the Government's account, rendering Section 11D inapplicable.

2. The Revenue contended that since wire drawing was not considered manufacture at the relevant time, the duty collected by the appellant from customers was not payable. Therefore, the Revenue argued that the amount collected should be credited to the Government's account under Section 11D. However, the Tribunal noted that Section 11D applies only when the assessee collects an amount exceeding the duty assessed and paid on excisable goods from buyers. As the duty in this case was assessed and paid to the Government, Section 11D did not apply.

3. The Tribunal analyzed Section 11D in detail, emphasizing that it pertains to situations where the assessee collects an amount exceeding the duty assessed and paid on excisable goods. The Tribunal upheld the Commissioner (Appeals)'s findings, stating that no amount remained unpaid to trigger Section 11D since the duty was assessed and paid to the Government. The Tribunal dismissed the Revenue's appeal, concluding that the impugned order was in line with Section 11D and that the Revenue's appeal had no merit.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the duty collected was paid to the Government, making Section 11D inapplicable in this case. The appeal by the Revenue was dismissed, affirming the decision of the Commissioner (Appeals).