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TMI Blog2002 (8) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... al difference explained as due to rounding off. The appellant and the department agree that as per the purchase orders, no discount is allowable nor any discount was allowed. The appellant has described in the invoice discount, the figure Y. 2. A show cause notice stating that the appellant had collected duty twice; once by including it in the price, and the other, by showing the excise duty amount separately on the invoices. The following demands were made :- SCN No. Date Period Covered Amount V/42/15/03/2000-Adjn. 28-6-2000 1994 to 1999 Rs. 1,02,22,507 V/42/15/03/2000-Adjn. 27-9-2000 Rs. 4,91,979 November 1999 Rs. 1,07,14,486 Invoking the larger period of limitation, seeking to recover the duty alleged to be collected twice under Section 11D of the Act. Another SCN V/52/15/03/ 2000, dt. 28-6-2000 was issued alleging that the discount was not passed on to the customer, therefore, a duty of Rs. 17,58,417 is to be paid. It was also proposed to levy penalty under Rule 173Q. 3. The appellants contend :- (a) That the abatement towar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the matter will have to go back for reconsideration. 08. To appreciate the facts I would like to examine the allegations levelled against the assessee in the impugned show cause notice. I observe that the department has issued two show cause notices, dt. 23-6-2000 and 27-9-2001. The main allegation in the said show cause notice is that the value adopted and reflected in the invoices for the purpose of duty is the price which is reflected/quoted in the tender/purchase order. The said tender/purchase order price is inclusive of Central Excise duty. I observe that this fact has also been admitted by the assessee vide their various written submissions and at the time of personal hearing also. This fact is also supported by the contentions mentioned in the tender price list. On perusal of the invoices under which the assessee cleared the goods to their customers, it is observed that assessee has again charged Central Excise duty on the cum-duty price mentioned in the tender/purchase order price. I observe that the department vide the show cause notice has alleged that in view of Section 11D of the Central Excise Act, 1944, the said excess Central Excise duty collected from the buyer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has collected total duty of Rs. 4,160/- (Rs. 1,926/- + Rs. 2,234/-). However the assessee has paid the duty of Rs. 2,234/-. Therefore the assessee has retained a sum of Rs. 1,926/- with him which he has not paid to the credit of the Central Government. The details of other invoices which were issued against the purchase orders is given at the Annexure to this order. Based on the above fact, it is pertinent that the assessee has collected Central Excise duty twice from the buyers of the goods which in fact he cannot under the law. However, I observe, that in the event of excess collection of Central Excise duty by the assessee from the buyer he is under moral and legal obligation to deposit the said portion of the duty to the credit of the Central Government. 11. I have also gone through, the decision of the Hon ble CEGAT cited supra wherein the Hon ble CEGAT has remanded the case for de novo adjudication afresh. So far as the question of discount or abatement is concerned, I observe that both have got no bearing in this case. At the first instance, neither any discount or abatement of Central Excise duty is allowed under the law. The assessee is at liberty to give discount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fide belief. I further observe that in Para 3.4 of 1997 (89) E.L.T. 557 (T) in the case of Indian Oxygen v. CCE, Bhubaneshwer, Hon ble CEGAT observed that it was plain and obvious that the party failed to inform the proper officer although they might have had intention to do so. This patent failure on the assessee s part cannot be given the garb of their bona fides. Therefore the defence plea is not acceptable. 14. Based on the above finding, I find that contravention of Rule 173C(3A) of Central Excise Act, 1944 is established against the assessee. Based on the above observations, it is clear that the assessee collected the total sum of amount of Rs. 1,02,22,507/- towards the Central Excise duty which was already included in the amount declared by them as assessable value/cum-duty price as per details in Annexure I to the show cause notice. The said amount was not paid by them to the Central Government. 15. The finding also holds good in relation to the amount of Rs. 4,91,979/- covered by show cause notice C.No. V/42/15/3/2000 Adjn., dt. 27-9-2000. (i) And confirmed an amount of Rs. 1,02,22,507/- collected towards Central Excise Duty without paying it to the Central Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ratna, a representative of the appellants in her statement has disclosed this discount was being calculated by them as follows :- (Q.4) You are showing the discount in your invoices whether it is as per the contract/purchase order of your customers ? If not what is the type of discount shown in your invoices. Please explain ? (A) The discount shown in the invoice is not discount given to any party or Govt. organization. It is nothing but abatement towards the excise duty. The purchase order from the party does not state that discount is to be given. We are giving one example where as the rates of excise duty were different from different years. In our invoice No. 541, dt. 17-3-99 the rate of excise duty is 16% and we have shown discount as 13.8% (which is nothing but abatement towards excise duty) as follows: Rs. 16/100 + 16. In our Invoice No. 171, dt. 29-10-97 the applicable excise duty is 15% and we have shown discount as 13.05% (which is nothing but abatement towards excise duty) as follows : Rs. 15/100 +15. (Q. 7) The general trade practice of giving discount is in uniformity in round figures. Where as you are giving discount rate in decimals. Please explain the reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence on record. (c) That the ld. Commissioner of Central Excise erred in law and on facts in holding that abatement of Central Excise duty is not allowed under law. (d) That the ld. Commissioner of Central Excise erred in law and on facts in not considering the description of discount in the invoice is nothing but abatement of Excise Duty. (e) That the ld. Commissioner erred in law and on facts in holding that the demand is not time-barred. (f) That the ld. Commissioner erred in law and on facts in invoking the provision of Section 11D of the Act, even though the Hon ble Madras High Court has held it be unenforceable. (g) That the ld. Commissioner ought to have appreciated that the amendment to Section 11D of the Act has not cured the defect pointed out by Madras High Court. (h) That the ld. Commissioner erred in law and on facts in levying penalty under Rule 173Q of the Act for an alleged violation of Section 11D even though none of the sub-clauses of Rule 173Q are applicable. (i) That the levy of penalty is not warranted on the facts and circumstances of the case. (j) That in any case, the penalty of Rs. 20 lakhs is excessive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Supreme Court there has been a short-payment of Rs. 767.23 over a period of 5 years. There is no case for making a demand for any amounts under Section 11D as made out. There is a case for demand of duty of Rs. 767.23. However, no demand has been made under Section 11A. Therefore, while we find that Rs. 767.23 is duty short-paid, we cannot direct its payment. 10. Since we do not find any amount to have been collected and required to be deposited under Section 11D, we find no reasons to uphold the penalty under Rule 173Q of the Central Excise Rules, 1944. We find that for contravention of Section 11D, if any, a penalty under Rule 173Q is not called for. Rule 173Q provides that if excisable goods are removed in contravention of the provisions of the Rules, then only penalty could be imposed under the Rule. No penalty under Rule 173Q is therefore called for. No calculations for the other show cause notices have been produced before us. We are therefore remanding the matter to the Commissioner to re-determine and work out duty payable, taking into consideration the formula laid down by the Hon ble Supreme Court in the case of MRF decision (supra). Since no such chart of calcul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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