2014 (5) TMI 343 - AT - Central Excise

Tribunal affirms appeal on separate account maintenance, emphasizing duty compliance and revenue deposit.

The Tribunal upheld the Commissioner (Appeals) decision in an appeal by Revenue regarding the maintenance of separate accounts for dutiable and exempted ... Demand of u/s 11D - demand of amount paid under Rule 6(3)(b) of Cenvat Credit Rules as reversed, u/s 11D as recovered from the customers - Held that:- The Larger Bench of the Tribunal in the case of Unison Metals Ltd. (2006 (10) TMI 171 - CESTAT, NEW DELHI), decided the question whether the amount of 8% [in this case 10%] debited from RG 23A Part II in terms of the provisions of Rule 57CC(1) and collected from the customers is required to be debited with the Government in terms of the provisions of Section 11D of the Central Excise Act, 1944. A perusal of the invoices placed on record clearly shows that they have debited their RG 23A account while paying 8% under Rule 57CC and some invoices show debit entry in their PLA. This makes it clear that the appellants have not retained the amount collected from the customers and that they have passed on the amount to the Government as provided under Section 11D of the Central Excise Act. Hence the charge of contravention of the provisions of Section 11D is not sustainable. The amount mentioned in the invoice as stated above was debited in their CENVAT account under Rule 6(b) of CENVAT Credit Rules. So, it was not retained by them and paid to the Government. - Demand cannot be made - Decided against the revenue. Issues:Appeal against Commissioner (Appeals) order - Maintainance of separate accounts for dutiable and exempted goods - Demand under Section 11D of Central Excise Act, 1944 - Imposition of penalty under Rule 25 of Central Excise Rules, 2002 - Interpretation of invoices mentioning duty amount - Compliance with Rule 6(b) of CENVAT Credit Rules.Analysis:The case involved an appeal by Revenue against the Commissioner (Appeals) order, where the adjudication order demanding an amount under Section 11D of Central Excise Act, 1944 was set aside. The respondents, engaged in manufacturing dutiable and exempted goods, did not maintain separate accounts for inputs used in both types of goods. A show-cause notice proposed a demand under Section 11D for not maintaining separate accounts. The adjudicating authority confirmed the demand, but the Commissioner (Appeals) overturned the decision.The Revenue contended that the Commissioner (Appeals) erred in following a Tribunal decision and argued that the amount collected by the respondents represented duty, falling under Section 11D. The invoices indicated the collection as duty, but the respondents argued compliance with Notification No. 3/2004-CE dated 6.1.2004. The Larger Bench's decision in Unison Metals Ltd. case was cited, emphasizing that amounts collected as duty should be deposited with the revenue.Upon examination of the invoices, it was found that the amount was debited in the CENVAT account under Rule 6(b) of CENVAT Credit Rules, indicating compliance. The Tribunal's decision in Unison Metals Ltd. case was deemed applicable, aligning with the Supreme Court's stance that repeat payment of excise duty is not intended. The judgment emphasized that the crucial factor was whether the collection was represented as excise duty, which was the case here, leading to the rejection of Revenue's appeal and disposal of the cross-objection.In conclusion, the Tribunal upheld the Commissioner (Appeals) decision, highlighting the importance of correctly representing duty amounts in invoices and ensuring compliance with relevant rules and notifications. The case underscored the significance of depositing duty amounts collected from customers with the revenue authorities, as mandated by the Central Excise Act and related rules.