Section 11D inapplicable to reverse-credit payments under Cenvat rules, as no duty was separately recovered from customers.

Section 11D of the Central Excise Act was held inapplicable to amounts reversed by an assessee under the reverse-credit mechanism in erstwhile Rule 57CC and corresponding Rule 6(3) of the Cenvat Credit Rules, 2004. The amount equal to 8% or 10% under that mechanism was treated as payment to the Revenue, not as duty retained by the assessee. The Board's circular, as clarified after the Larger Bench decision, supported this position, and the record did not show any separate recovery of duty from customers that would attract Section 11D. The Revenue's appeal was therefore rejected.

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Issues: Whether Section 11D of the Central Excise Act, 1944 applied to the amount reversed by the assessee under the erstwhile Rule 57CC corresponding to Rule 6(3) of the Cenvat Credit Rules, 2004.

Analysis: The amount of 8% or 10% under the relevant reverse-credit mechanism is paid to the Revenue and is not an amount retained by the assessee. The Board's circular, as clarified after the Larger Bench decision, states that Section 11D does not apply in such cases. The record also did not establish that any duty amount had been separately recovered from customers in a manner attracting Section 11D.

Conclusion: Section 11D was held to be inapplicable, and the Revenue's appeal was rejected.

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