2010 (3) TMI 583 - HC - Central Excise

Cenvat Credit dutiable and exempted goods non maintenance of separate records nature of payment of 8% - recovered from party whether to be paid u/s 11D Circular No. 599/36/2001 CX., dated 12-1-2001 - the stand adopted by Revenue has not found favour and Tribunal has not accepted that the amount collected by respondent-assessee was duty of excise which was liable to be paid to the Central Government under provisions of Section 11D of the Act. - Held that - Merely because the Adjudicating Authority has referred to the circular in its order does not necessarily mean that the superior forum is required to consider everything that is stated in the order of the Adjudicating Authority. An appellate authority is required to only decide issues raised before it not only by way of the memorandum but those that may be urged at the time of hearing assessee is not liable to pay u/s 11D

Summary

Issues:
1. Whether the Tribunal was correct in not upholding the demand by the Revenue from the assessee for excise duty?
2. Whether the Tribunal was correct in allowing the appeal filed by the assessee without considering a specific circular?
3. Whether the Tribunal was correct in passing an order in favor of the assessee despite their failure to maintain separate accounts under CENVAT Credit Rules 2002 and without paying the required amount under Section 11D?

Analysis:

Issue 1:
The appellant argued that the Tribunal erred in not upholding the demand for excise duty from the assessee, who had collected 8% from buyers but had not paid it to the exchequer. The Court explained that Section 11D of the Act mandates payment to the Central Government if a person collects an amount exceeding the assessed duty. The Tribunal found that the amount collected by the assessee was not excise duty, leading to the dismissal of the appellant's argument.

Issue 2:
Regarding the second issue, the Court noted that the Tribunal's decision to allow the appeal without considering a specific circular was not a substantial question of law. The Court emphasized that the circular should have been actively raised by the Revenue during the appeal process for the Tribunal to consider it. The failure to do so did not warrant interference by the Court.

Issue 3:
In addressing the third issue, the Court clarified that there was no legal obligation for the Tribunal to rule in favor of the Revenue simply because the assessee did not maintain separate accounts. The Court found the formulation of the questions lacking, as there was no basis for the assessee to be held liable under Section 11D of the Act due to the absence of specific findings.

The Court ultimately dismissed the appeal, stating that none of the proposed questions raised by the appellant qualified as substantial questions of law arising from the Tribunal's order. The judgment emphasized the importance of raising relevant issues during the appeal process and established that the Tribunal's findings must be respected unless there is evidence of perversity.