Section 11D recovery limited to duty collected and retained; amounts already paid to revenue cannot be demanded again.

Section 11D of the Central Excise Act, 1944 was held inapplicable where an assessee had already paid the amount shown in invoices on exempted clearances to the revenue and had not retained it as duty collected from customers. The Tribunal followed its earlier identical ruling and the Larger Bench view that Section 11D operates only when an amount is collected as excise duty and retained by the manufacturer. The reasoning also reflected the principle that excise duty is not meant to be recovered twice on the same amount, and the CBEC circular accepting the Larger Bench position supported this interpretation.

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Issues: Whether the amount paid by the assessee against exempted clearances, though described as duty in invoices, could be demanded again under Section 11D of the Central Excise Act, 1944 when the amount had already been paid to the revenue and was not retained.

Analysis: The assessee had debited 8% of the value of exempted goods in terms of Rule 57AD of the Central Excise Rules, 1944. The demand under Section 11D was based on the premise that the amount was collected from customers as excise duty. The Tribunal followed its earlier decision on the identical issue and the Larger Bench view that Section 11D applies only where an amount is collected as duty and retained by the manufacturer, and not where the amount has already been paid over to the revenue. The reasoning was also found consistent with the principle that excise duty is not intended to be paid twice over. The departmental acceptance of the Larger Bench view through the CBEC circular further supported the conclusion.

Conclusion: The demand under Section 11D was not sustainable, and the assessee was entitled to relief.

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