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2018 (7) TMI 317 - AT - Central ExciseExcise Duty as well as education cess was collected but not deposited to Government - contravention of provisions of Section 11D and 11DD of Central Excise Act, 1944 - reversal of credit was done - Board Circular No.870/08/2008-CX dated 16.05.2008 - Held that - The reversal of amount was done by the respondent Belgharia Unit from where the Bogies and Couplers were collected without payment of duty by the respondent. There is no dispute about the reversal of 8% or 10% - it is also observed that the amounts were duly debited by TEXMACO Belgharia in terms of Rule 6(3) of Cenvat Credit Rules and it was not alleged that TEXMACO Belgharia raised appeal for recovery of said amount separately from where was recovered through the bill has been paid. The Tribunal in the respondent assessee s case M/S. TEXMACO LTD. VERSUS COMMR. OF CENTRAL EXCISE, KOLKATA-III 2016 (5) TMI 896 - CESTAT KOLKATA by relying upon the Larger Bench decision in the case of Unison Metals Ltd. vs. Commissioner of Central Excise, Ahmedabad-1 2006 (10) TMI 171 - CESTAT, NEW DELHI and the CBEC Circular No.870/8/2008-CX (supra) have discussed the issue in details and allowed the assessees appeal. Education cess not at all paid to the Government - Held that - The allegation regarding Education Cess amounting to ₹ 4,93,532/- not at all paid to Govt. has further been verified and it is observed that the same relates to some supplementary claim for which claim was once raised and disputed by Railways and those were paid by their supplier i.e. Belghoria Unit prior to April, 2005 - demand do not sustain. Appeal dismissed - decided against Revenue.
Issues:
1. Alleged contravention of provisions of Section 11D and 11DD of Central Excise Act, 1944. 2. Disputed collection of Central Excise duty and education cess by the respondent. 3. Compliance with conditions prescribed in Board Circular No.870/08/2008-CX. 4. Reimbursement claims for couplers and bogies. 5. Application of Section 11D in the case. 6. Verification of education cess payment. 7. Decision on appeal and cross objection. Analysis: Issue 1: Alleged contravention of provisions of Section 11D and 11DD The show cause notice was issued alleging contravention of Section 11D and 11DD. The adjudicating authority dropped the proceedings, leading to the appeal by the Revenue and cross objection by the respondent. Issue 2: Disputed collection of Central Excise duty and education cess The Revenue claimed that the respondent collected amounts as Central Excise duty and education cess without depositing the same. The respondent argued that the amounts were not collected as duty but as reimbursement for couplers and bogies supplied to Railways, supported by contractual agreements and Railway Board clarifications. Issue 3: Compliance with conditions in Board Circular The Revenue contended that conditions in Board Circular No.870/08/2008-CX were not complied with by the respondent. However, the respondent maintained that the reimbursement claims were legitimate as per contractual terms and rules. Issue 4: Reimbursement claims for couplers and bogies The respondent's Belgharia unit removed couplers and bogies to the Agarpara unit without payment of duty, following rules for remitting a percentage of the price. The amounts were debited and reimbursed as part of the cost of wagons supplied. Issue 5: Application of Section 11D The respondent argued that Section 11D does not apply as they were not liable to pay duty on the goods in question. They cited a relevant decision and emphasized that the alleged collection of excess duty did not occur. Issue 6: Verification of education cess payment The adjudicating authority discussed the education cess payment issue, concluding that the amount was related to a disputed claim paid by the supplier prior to a specified date. The Tribunal's order and circular clarified the non-applicability of Section 11D in this context. Issue 7: Decision on appeal and cross objection After considering the arguments and evidence, the Tribunal found no infirmity in the impugned order. The appeal was dismissed, and the cross objection was disposed of accordingly. This comprehensive analysis covers the key issues raised in the legal judgment, detailing the arguments presented by both parties and the Tribunal's decision on each matter.
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