Section 11D recovery fails where contractual price, not excise duty, is collected on exempt goods; pre-deposit waived.

Section 11D of the Central Excise Act applies only where a person liable to pay excise duty collects an amount in excess of the duty payable by representing it as excise duty. Here, the amount collected from the Railways was shown under the contract as part of the price of the wagons, and the goods were stated not to attract duty on the facts presented. On that basis, the demand was considered prima facie not recoverable under section 11D, and full waiver of pre-deposit with stay of recovery was granted pending disposal of the appeal.

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Issues: Whether the demand could be recovered under section 11D of the Central Excise Act, 1944 on the footing that the appellant collected an amount described as excise duty, and whether the appellant was entitled to waiver of pre-deposit and stay of recovery.

Analysis: Section 11D applies where a person liable to pay excise duty collects any amount in excess of the duty payable by representing it as excise duty. On the facts, the appellant was not liable to pay duty on the goods in question, and the amount collected from the Railways was shown by the contract as part of the price of the wagons. The collection was therefore not shown to be a recoverable amount under section 11D at the stage of stay, and the demand appeared prima facie unsustainable.

Conclusion: The demand was held prima facie not recoverable under section 11D, and full waiver of pre-deposit with stay of recovery was granted in favour of the assessee.

Final Conclusion: The interim demand was kept in abeyance and the appellant obtained complete protection against recovery pending disposal of the appeal.

Ratio Decidendi: Section 11D is attracted only where an amount is collected as excise duty by a person liable to pay such duty; amounts recovered as part of contractual price for exempt goods do not, at least prima facie, fall within its scope.

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