Recovery of buyer-collected duty amounts fails under Cenvat Rule 12; invoice wording pointed to Section 11D instead.

Amounts recovered from buyers could not be treated as Cenvat credit merely because they arose from exempt clearances, where the manufacturer had already paid 8% of the sale price under Rule 6 of the Cenvat Credit Rules, 2002. On that reasoning, Rule 12 could not be used to recover the sum. However, because the invoices described the amount as "Excise Duty Payable," the amount was represented as duty of excise, so recovery would instead have fallen under Section 11D of the Central Excise Act, 1944. The notice did not invoke that provision, and the demand under Rule 12 was therefore unsustainable.

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Issues: Whether the demand raised under Rule 12 of the Cenvat Credit Rules, 2002 for recovery of amounts collected from the buyer was sustainable, and whether the amounts shown in the invoices as excise duty could be recovered under any other provision.

Analysis: The manufacturer had paid 8% of the sale price of exempt clearances in terms of Rule 6 of the Cenvat Credit Rules, 2002, which served the purpose of that rule. The amount subsequently recovered from the buyer was not Cenvat credit and could not be equated with irregularly availed credit on exempted goods. On that basis, Rule 12 could not be invoked to recover the amount. However, the invoices issued by the manufacturer themselves showed the amount against the entry "Excise Duty Payable", so the amount was represented as duty of excise. On that footing, the proper provision for recovery would have been Section 11D of the Central Excise Act, 1944, though that provision had not been invoked in the notice.

Conclusion: The demand under Rule 12 of the Cenvat Credit Rules, 2002 was not sustainable and the appeal was allowed.

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