Separate excise duty collected on exempted goods attracts Section 11D liability despite reversal of credit.

Separate disclosure of excise duty in invoices and collection of that amount from customers on clearance of exempted goods attracted liability under Section 11D of the Central Excise Act, 1944. The amount was treated as duty recovered from buyers, not as part of the sale price, and the fact that credit had been reversed under Rule 57CC of the Central Excise Rules, 1944 did not remove the statutory obligation to pay over the separately collected sum. The conclusion recorded is that the amount was recoverable under Section 11D and the assessee's challenge failed.

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Issues: Whether the amount shown separately as excise duty in the invoices and collected from customers on clearance of exempted goods was recoverable under Section 11D of the Central Excise Act, 1944, notwithstanding the assessee's reversal of credit under Rule 57CC of the Central Excise Rules, 1944.

Analysis: The invoices specifically disclosed excise duty separately over and above the price of the goods. The amount collected was not merely part of the price but was recovered as duty from the customers. Since the goods in question were not liable to duty, any amount collected in the guise of excise duty attracted Section 11D of the Central Excise Act, 1944. The treatment under Rule 57CC of the Central Excise Rules, 1944 did not negate the statutory liability arising from separate collection of duty.

Conclusion: The amount separately collected was recoverable under Section 11D of the Central Excise Act, 1944, and the assessee's challenge failed.

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