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2018 (2) TMI 211 - AT - Central ExciseRecovery of amount by the appellant - Revenue entertained a view that the appellants have collected an amount representing Central Excise duty and the said amount should be deposited with the Government in terms of Section 11 D of the Central Excise Act, 1944 - appellant s case is that they have recovered the amount reversed in terms of Rule 6 (3) (b) from the buyer. This cannot be considered as recovery of amount representing Central Excise duty attracting the provisions of Section 11 D. Held that - though the clearance documents mentions the amount as CENVAT (BED), it is clearly endorsed that the amount is towards amount payable on exempted products steam in terms of Rule 6 (3) (b). This makes it clear that the appellant passed on the burden of their reversal of the amount in terms of CCR, 2002 to the buyers - The amount of 8% already reversed as per the CENVAT Credit Rules cannot be demanded under Section 11 D, even if the same is collected from the buyers, as per the invoices. Appeal allowed.
Issues:
- Applicability of Section 11D of the Central Excise Act, 1944 on the recovery of an amount representing Central Excise duty - Interpretation of Rule 6 (3) (b) of the Cenvat Credit Rules, 2002 regarding reversal of credit - Impact of Circular dated 16.05.2008 of the Board and the decision in Unison Metals Ltd. Vs. CCE, Ahmedabad - 2006 (4) STR 491 (Tri.-LB) on the case Analysis: 1. Applicability of Section 11D: The appeal in this case was against the order of the Commissioner of Central Excise, Chennai, regarding the recovery of an amount reversed by the appellants in terms of Rule 6 (3) (b) of the Cenvat Credit Rules, 2002. The Revenue contended that the appellants collected an amount representing Central Excise duty, which should be deposited with the Government under Section 11D of the Central Excise Act, 1944. The original authority upheld this view. 2. Interpretation of Rule 6 (3) (b) of Cenvat Credit Rules: The appellants, engaged in manufacturing various products liable to Central Excise duty, were availing Cenvat credit on input services. They cleared some final products on a stock transfer basis without duty payment, availing exemption under Notification No. 6/2002-CE. Due to not maintaining separate accounts for Cenvat credit on common inputs, they reversed 8% on the value of exempted goods cleared as per Rule 6 (3) (b). The recovery of this reversed amount was disputed, with the appellants arguing that it was not a recovery of Central Excise duty under Section 11D. 3. Impact of Circular and Previous Decision: The appellants contended that the recovery from the buyer was not Central Excise duty but a reversed amount under Rule 6 (3) (b). They relied on a Circular dated 16.05.2008 of the Board and a previous decision of the Tribunal in Unison Metals Ltd. Vs. CCE, Ahmedabad, which supported their position. The Tribunal analyzed the documents and found that the amount recovered was towards the reversed amount under CCR, 2002, passed on to the buyers. It held that the amount already deposited under Rule 57 C C of the CCR cannot be subjected to Section 11D. The provisions of Rule 6 (3) (b) were deemed similar to the erstwhile Rule 57 C (c), and the Board's circular further supported this interpretation. 4. Conclusion: After considering the arguments and precedents, the Tribunal set aside the impugned order, ruling in favor of the appellants. It was established that the recovery of the reversed amount, even if collected from buyers, did not attract Section 11D as the amount had already been paid to the Revenue as per the Cenvat Credit Rules. The decision highlighted the distinction between recovered amounts under Rule 6 (3) (b) and Central Excise duty, providing relief to the appellants. (Order dictated and pronounced in the Open Court)
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