Section 11D does not apply without separate collection of excise duty from buyers; embedded price inclusion is insufficient.

Section 11D of the Central Excise Act applies only where an assessee actually collects an amount from the buyer as excise duty. Where sale invoices do not show any separate duty recovery, and the record does not establish that customers were charged excise duty apart from the contract price, the amount is treated as embedded in the agreed price rather than separately collected. Proforma invoices prepared only for accounting purposes and not issued to customers do not prove such recovery. On these facts, Section 11D had no application and the demand based on alleged collection of duty from buyers was unsustainable.

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Issues: Whether the amount embedded in the contract price, without separate collection in the sale invoices, could be treated as an amount collected as duty of excise and made payable to the credit of the Central Government under Section 11D of the Central Excise Act, 1944.

Analysis: Section 11D applies only where the assessee actually collects an amount from the buyer by representing it as duty of excise. The sale invoices did not show any separate collection of duty, and the record did not establish that any amount was recovered from customers as excise duty. The contract price was inclusive of duty, and the proforma invoices relied upon by the Revenue were prepared only for accounting purposes and were not issued to customers or accompanied the goods. In these circumstances, the duty was treated as already embedded in the agreed price and not as a separate recovery from buyers.

Conclusion: Section 11D had no application, and the demand based on alleged collection of duty from customers was unsustainable.

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