Cenvat reversal on exempted clearances cannot be redemanded as excise duty under Section 11D.

An amount reversed under Rule 6(3)(b) of the Cenvat Credit Rules, 2002 for exempted clearances was treated as a reversal made in compliance with the credit rules, not as a separate sum retained as excise duty. Although invoices described it as Cenvat (BED), they also showed it as payable on exempted products, and the Board circular dated 16.05.2008 supported that such a reversed amount does not become independently exigible merely because it is recovered from buyers. On that basis, the amount could not be demanded again under Section 11D of the Central Excise Act, 1944.

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Issues: Whether the amount reversed by the assessee under Rule 6(3)(b) of the Cenvat Credit Rules, 2002 in respect of exempted clearances could be treated as an amount representing excise duty and demanded under Section 11D of the Central Excise Act, 1944.

Analysis: The clearance documents described the amount as Cenvat (BED), but they also recorded that it represented the amount payable on exempted products under Rule 6(3)(b). The amount was a reversal made in terms of the Cenvat Credit Rules on exempted clearances, and the same reasoning applied to the earlier provision considered in the precedent relied upon by the Tribunal. The Board circular dated 16.05.2008 also supported the view that a sum already reversed and paid in this manner does not become a separate amount retained as duty merely because it is recovered from buyers in the invoices.

Conclusion: The amount reversed under Rule 6(3)(b) could not be demanded again under Section 11D, and the issue was decided in favour of the assessee.

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