Section 11D liability on buyer-collected amounts fails where duty has already been discharged at clearance.

Section 11D of the Central Excise Act, 1944 applies only where an amount representing duty is collected from buyers and not already discharged as duty at the time of removal of goods. On the facts noted, the assessee had reversed an amount equivalent to 8% of the sale value while clearing exempted goods, and the Larger Bench principle relied on in the order governed the issue. The recovered amount therefore did not fall within Section 11D, and the demand was held unsustainable in favour of the assessee.

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Issues: Whether the amount recovered by the appellant from buyers while clearing exempted goods was liable to be demanded under Section 11D of the Central Excise Act, 1944.

Analysis: Section 11D applies where an amount representing duty is collected without having been deposited as duty at the time of removal of goods. The appellant had reversed an amount equivalent to 8% of the sale value of the goods while clearing them, and the matter was governed by the principle already laid down by the Larger Bench decision relied upon in the order. On those facts, the amount recovered could not be brought within Section 11D.

Conclusion: The demand under Section 11D was unsustainable and the issue was decided in favour of the assessee.

Ratio Decidendi: Section 11D is attracted only when duty representing an amount collected from buyers has not already been discharged in the manner required at the time of removal of the goods.

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