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TMI Blog2008 (1) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... cation, requirement of pre-deposit is waived and the appeal is taken up. 2. The facts of the case are that during December 01 to February 02, the appellants had cleared Viscose Staple Fibre yarn availing exemption under Notification No. 3/2001 dated 1-3-2001. The only condition for availing the above exemption was that the assessee did not take credit of duty paid on the inputs. While making the impugned clearances, the assessee collected an amount equivalent to the credit relatable to inputs contained in the finished products from the buyers. In April 02, the appellants returned the excess amounts collected as excise duty to its customers by raising credit notes in favour of them. The original authority dropped the proceedings proposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom its buyers in April 2002 itself whereas, the show cause notice was issued in May 2005. As there is no evasion of duty involving suppression of facts, collusion or fraud, the penalty imposed under Section 11AC is not sustainable. In the Sangam Processors (Bhilwara) Ltd. (supra), the Tribunal had dealt with a claim for refund of duty filed in 1986 and where the claimants had returned the amounts of duty by issuing credit notes on 26-12-1988. The Tribunal observed that the duty incidence passed on could not be remedied by issue of credit notes to customers. 5.1 The Tribunal made following observations in Sangam Processors v. CCE , Jaipur - 1994 (71) E.L.T. 989 (Tri.) : The appellants do not deny the fact that during the relevant perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuing credit notes. 5.2 The ratio of the above decision is that excess duty collected by the assessee at the time of clearance of the goods cannot be allowed as refund if the same is returned later on through credit notes to the buyer of the goods. In other words by returning the excess duty to the buyer, the assessee does not become entitled to refund and the same remains with the Government. An amount collected as duty has to be deposited with the Government in terms of Section 11D of the Act. If the amount is not deposited, the same can be recovered. Recovery of such amount due to the Government cannot be obviated by returning the same to the buyer once the recovery is detected and the amount demanded in terms of Section 11D of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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