Section 11D of the Central Excise Act applies only to duty collected and not paid to the exchequer.

Section 11D of the Central Excise Act, 1944 applies only where an amount is collected as duty and retained without payment to the Government. Where exempted goods are cleared and an amount is debited under the CENVAT scheme and reimbursed by the buyer, that collection is not duty for Section 11D purposes. The Tribunal followed its earlier ruling in the same assessee's case and held that the provision had no application because the amount collected did not represent excise duty. Accordingly, Section 11D was held inapplicable to the amount collected on exempted goods.

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Issues: Whether the amount equal to 8% of the value of exempted goods collected from the buyer was duty so as to attract Section 11D of the Central Excise Act, 1944.

Analysis: The respondents cleared exempted goods after debiting 8% of the sale value in terms of the CENVAT scheme, and the buyer reimbursed that amount. The decisive question was whether such collection constituted duty collected but not paid to the exchequer. The Tribunal followed its earlier order in the same assessee's case and held that the amount debited was not duty. Section 11D applies only where duty is collected and retained without payment to the Government; when the amount collected is not duty, the provision has no application.

Conclusion: Section 11D was not attracted, and the Revenue's appeal was dismissed.

Ratio Decidendi: Section 11D of the Central Excise Act, 1944 applies only to amounts collected as duty and not paid to the exchequer; an amount collected that is not duty does not attract the provision.

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