Section 11D inapplicable where duty-like amounts on exempted clearances are adjusted in CENVAT, not retained.

Amounts shown in invoices for exempted clearances and debited in the CENVAT account under Rule 6(3)(b) were not liable to deposit under Section 11D of the Central Excise Act, 1944. The decisive consideration was that the sum was not an additional amount retained by the manufacturer but was adjusted in relation to exempted clearances under Notification No. 3/2004-CE. Section 11D applies only where an amount collected as duty is retained by the manufacturer instead of being remitted to the Government. On that basis, Section 11D was not attracted.

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Issues: Whether the amount collected from buyers and debited in the CENVAT account in respect of exempted clearances was liable to be deposited under Section 11D of the Central Excise Act, 1944.

Analysis: The amount reflected in the invoices was not an additional sum retained by the assessee; it was shown as arising from the treatment of exempted clearances under Notification No. 3/2004-CE and was debited in the CENVAT account in terms of Rule 6(3)(b) of the CENVAT Credit Rules, 2002. The decisive factor was whether the amount collected as duty remained with the assessee or was passed on to the Revenue. Since the amount had already been adjusted and was not retained, the situation fell within the principle that Section 11D applies only where an amount collected as duty is retained by the manufacturer and not remitted to the Government.

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

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