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Issues: Whether, on clearances made under nil rate or concessional duty, the assessee could be presumed to have collected duty from buyers merely because the wholesale price remained the same, so as to attract Section 11D of the Central Excise Act, 1944.
Analysis: The assessee was clearing medicaments under a notification benefit and, during the relevant period, no duty was paid on the initial clearances. The revenue's case rested on the fact that the wholesale price charged to customers remained unchanged. The Tribunal held that in identical factual circumstances it had already been decided that the assessee cannot be presumed to have collected duty from buyers during nil-rate clearances, and that the duty cannot be treated as built into the sale price merely because the price did not vary across nil, concessional, and full-duty slabs.
Conclusion: Section 11D of the Central Excise Act, 1944 was not invocable on the facts, and the finding against the assessee was set aside.
Final Conclusion: The demand founded on alleged collection of duty from customers could not be sustained, and the assessee obtained relief.
Ratio Decidendi: Where the assessee clears goods at nil rate or under a concessional exemption and the sale price remains unchanged, duty cannot be presumed to have been collected from buyers unless there is evidence that the duty element was actually recovered from them.
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