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TMI Blog2010 (9) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Clinkers, falling under Chapter Heading 25 of Central Excise Tariff Act, 1985. The cement manufactured by the appellant attracts Excise duty at specific rate of Rs. 350/- PMT if the same is cleared in bagged condition duly packed in HDPE paper bags etc. They are also entitled to avail credit of duty paid on HDPE bags, Poly-propylene bags or paper bags etc. As per the appellants, the rate of 16% ad valorem on HDPE bags roughly comes to Rs. 18/- per Ton of cement and they availed and utilized said credit for payment of duty towards their final product i.e. cement cleared in bagged condition. As such, he submits, in essence, duty paid out of their pocket comes to Rs. 332/- PMT in respect of cement cleared in bagged condition. The appellant also cleared the cement in bulk/loose condition to their bagging plants located at Magdalla (Surat), Navi Mumbai and Mangalore, where they are further bagged. In terms of Notification No. 15/99-C.E., dt. 26-3-99, the concessional rate of duty of Rs. 332/- PMT has been prescribed on the cement cleared from the factory in bulk/loose condition for further packing in their bagging plants, subject to observance of certain conditions. As the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d submits that the bagged cement attracts higher rate of duty by Rs. 18/- PMT, inasmuch as the same amount was available to the appellant as Modvat Credit paid on the bags. As such, he submits that, in essence, the cement cleared in bags from the factory also attracts duty @ Rs. 332/- PMT. Since such credit is not available at bagging depot, the Government has prescribed lower rate of duty of Rs. 332/- PMT. As such, submits the learned advocate that where bagged cement if cleared to the customer from a factory or the depot, the amount of duty paid by them essentially remains the same. By drawing our attention to the commercial invoices raised at Magdalla depot, he explained that the same were computer generated invoices and carried the following words : "Central Excise duty @ Rs. 350/- PMT was included in the price". 6. He submits that there was an error in the computer showing Rs. 350/- PMT, which error was corrected by them subsequently in October 2000. He submits that the plants were not required to pay any duty of Excise and as such reflection of Rs. 350/- PMT in the invoices generated at the plants, cannot be held to be covered by the provisions of Section 11D, which only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e person on finalization of assessment or any other proceeding for determination of the duty of excise relating to the excisable goods referred to in sub-section (1) or sub-section (1A)." 10. As is clear from the above, sub-section (1) of Section 11D is to the effect that person who is liable to pay the duty under this Act and has collected any amount in excess of duty paid, such excess collection represented as duty of Excise, is required to be paid to the Revenue. Simple and plain interpretation of the above provision leads us to observe that the Section provides for payment of such excess amount collected as duty of Excise, without going into the economics of the contract price or the fact as to whether such excess amount was profit element of the price or not. The language of said Section is un-ambiguous and no legislative intent is required to be read into. Learned advocate's plea that the difference of Rs. 18/- PMT was created by the legislation with a purpose and the intention was to levy less duty on the loose cement by an amount equivalent to the Modvat Credit available on these bags cannot be appreciated. As already discussed, the provisions of Section 11D are very clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax payable by him under the provisions of the Act. Tax under the Act, whether it is sales tax or general sales tax, is payable by a dealer to the Government and not to a private party. The fact that the Act and the Rules made thereunder permit a seller to recover from his purchaser the amount which he would have to pay to the Government by way of tax does not convert the amount collected by the seller into a tax. If a purchaser from whom his seller has so recovered the amount of tax recoups such amount paid by him from his own purchaser when he comes to resell the goods, he is not prohibited by the Act from doing so, so long as he does not represent to his own purchaser that this is the amount of tax which he was liable to pay by way of tax. In thus recouping himself he is really increasing his sale price with a view to reimburse himself for an extra item of cost. There is no prohibition under the Act against a reseller thus reimbursing himself by increasing his selling price and in our opinion whether he does so by increasing the selling price or by showing the amount by way of tax collected from him by his own vendor as a separate item in the bill makes no difference. So long a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchasers and shown in the bills issued by them as surcharge on account of sales tax paid by them was not in contravention of the said Section 46(2) except with respect to the amount in excess of the amount recovered from the applicants by the applicant's vendors. The Tribunal while disposing of this reference will calculate the aggregate of the amount which according to our judgment was collected by the applicants in contravention of the said Section 46(2) of the Act and would only direct forfeiture of such amount." 15. It again becomes clear from the above paragraph that the amount collected by the applicant from their purchaser and shown as surcharge on account of sales tax in the bills in respect of relevant transactions of the sales was required to be held in contravention of Section 46(2) of Bombay Sales Tax Act. In any case, we find that the ratio of the above decision, being in respect of the altogether different provisions of law, would not be strictly applicable to the provisions of Section 11D. As such, no reliance can be placed upon the same. We, accordingly, upheld the confirmation of demand of duty of Rs. 10,92,639/- in respect of said Magdalla depot of the Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng raised at Magdalla bagging plant showing Excise duty as Rs. 350/- PMT and by observing that the appellant has employed similar software for generation of invoices at all the three bagging plants, it has to be held that they have collected amount @ Rs. 350/- PMT at their Navi Mumbai and Mangalore plants. 18. However, we find no merits in the above reasoning adopted by the Commissioner. Admittedly, the invoices raised at Navi Mumbai and Mangalore bagging plants do not reflect any amount of Excise duty. In this scenario, it cannot be said that the appellant has collected amount @ Rs. 350/- PMT from their customers by representing the same as Excise duty. The observation of the Commissioner that same software system was employed at all the three different places, does not seem to be carrying any weight inasmuch as in that case, the commercial invoices raised at Mangalore and Navi Mumbai bagging plants would also have carried identical remarks as were noted in the invoices issued by Magdalla bagging plant. 19. In any case, we find that the provisions of Section 11D are applicable only to that amount which stands collected by the assessee from their customers by representing the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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