Invoice-shown duty recoverable under Section 11D, but penalty fails without suppression, misstatement, or fraud.

Where invoices reflect duty as payable at a higher rate, the amount so shown is recoverable under Section 11D of the Central Excise Act, even if the assessee claims it did not collect excess duty from buyers. The duty demand with interest was therefore sustained. Penalty under Rule 173Q of the Central Excise Rules was not justified because the record did not establish willful misstatement, suppression of facts, or fraud. The penalty was consequently deleted. The resulting position is that recovery of the invoiced duty amount was upheld, while the punitive component was removed for absence of culpable conduct.

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Issues: (i) whether the amount shown as duty payable at a higher rate in the invoices was recoverable under Section 11D of the Central Excise Act, 1944; (ii) whether penalty under Rule 173Q of the Central Excise Rules, 1944 was sustainable.

Issue (i): whether the amount shown as duty payable at a higher rate in the invoices was recoverable under Section 11D of the Central Excise Act, 1944.

Analysis: The invoices issued to buyers reflected duty payable at 12.8%, and the amount so shown was treated as duty liability recoverable under Section 11D. The plea that the assessee had actually debited only the duty payable and had not collected excess duty from buyers was not accepted.

Conclusion: The demand of duty along with interest was upheld in favour of Revenue.

Issue (ii): whether penalty under Rule 173Q of the Central Excise Rules, 1944 was sustainable.

Analysis: Penalty was examined on the footing that the record did not contain an allegation of willful misstatement, suppression of facts, or fraud. In the absence of such culpable conduct, penalty was held to be unwarranted.

Conclusion: The penalty was set aside in favour of the assessee.

Final Conclusion: The demand of duty with interest was sustained, while the penalty component was deleted, resulting in a partial allowance of the appeal.

Ratio Decidendi: Where duty is shown as payable in invoices, the amount is recoverable under Section 11D; penalty, however, requires a culpable element such as suppression, misstatement, or fraud.

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