Tribunal rules demand for excise duty recovery unsubstantiated under Section 11D

The Tribunal found that the demand for recovery of excise duty under Section 11D of the Central Excise Act, 1944 could not be sustained in the case. It was held that in the absence of clear evidence of collecting excise duty separately, the provisions of Section 11D were not attracted. Therefore, the impugned order was set aside, and the appeal was allowed with any consequential relief.

---

---

Issues involved:
Interpretation of Section 11D of the Central Excise Act, 1944 regarding recovery of excise duty allegedly collected by the appellant without separately indicating it on invoices.

Detailed Analysis:

Issue 1: Recovery under Section 11D
The appellant had entered into a contract with Tamil Nadu Water Supply & Drainage Board (TWAD) for supply of pre-stressed concrete pipes exempted under Notification No. 6/2002-CE. The department alleged that the appellant collected excise duty by quoting prices inclusive of it. The appellant argued that they did not collect any amount described as excise duty and the invoice did not show excise duty separately. The Tribunal referred to a previous order in the appellant's case where it was held that demand under Section 11D cannot be sustained if there is no evidence of collecting any amount representing excise duty separately.

Issue 2: Composite Price Contract
The department contended that the agreement with TWAD was a fixed price contract inclusive of all taxes, indicating collection of excise duty. However, the Tribunal emphasized that to trigger Section 11D, clear evidence of collecting an amount as excise duty is required. Citing previous tribunal decisions, it was noted that in cases of composite contracts where excise duty is inclusive, a demand under Section 11D cannot be raised. The absence of evidence showing separate indication of excise duty on sales documents led to the conclusion that Section 11D provisions were not attracted in this case.

Conclusion:
Based on the analysis of the arguments and previous tribunal decisions, the Tribunal found that the demand for recovery of excise duty could not be sustained. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

---