Appellant not liable for excise duty on medicaments sold at fixed prices

The Tribunal held that the appellant, engaged in trading medicaments at NPPA-fixed prices, was not liable to deposit excise duty under Section 11D of the Central Excise Act, 1944. As the appellant did not separately indicate excise duty in invoices and did not collect amounts representing excise duty from buyers, the Tribunal found that the appellant, not being the manufacturer, was not obligated to deposit excise duty. Relying on precedent cases, the Tribunal concluded that any excise duty liability, if applicable, rested with the manufacturer, not the appellant. The appeal was allowed, and the appellant was relieved from depositing excise duty under Section 11D.

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Issues:
1. Whether the appellant is liable to deposit excise duty under Section 11D of the Central Excise Act, 1944 for traded goods.

Analysis:
The case involved a Government of India undertaking engaged in both manufacturing and trading of medicaments. The appellant procured medicines from loan licensees at a discount and sold them at prices fixed by the NPPA under the DPCO. The revenue contended that as the appellant sometimes sourced goods from units not liable to excise duty, they were deemed to have collected excise duty from customers and were thus obligated to deposit it under Section 11D.

The appellant argued that they were not manufacturers for excise purposes but traders, and the loan licensees were responsible for manufacturing. They emphasized that the prices were composite, with no separate indication of excise duty in invoices. Citing precedent cases, the appellant asserted that any extra duty, if applicable, should be collected from the actual manufacturer or loan licensee, not them.

The Additional Commissioner reiterated that the NPPA prices factored in excise duty, and as the appellant recovered amounts equivalent to these prices, they had effectively collected excise duty and were liable to deposit it under Section 11D. However, the Tribunal found that the appellant was only trading the goods, selling them at NPPA-fixed prices and purchasing them at discounts, without indicating excise duty separately in invoices.

Relying on the Tribunal's previous decision in the Hindustan Petroleum Corporation Ltd. case, the Tribunal concluded that Section 11D did not apply in the present scenario. They noted that no amount representing excise duty was collected from buyers, and as the appellant was not the manufacturer and had not paid excise duty, any liability under Section 11D, if applicable, would rest with the manufacturer, not the appellant. Consequently, the appeal was allowed, and the appellant was not required to deposit excise duty under Section 11D.

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