Tribunal overturns duty demand based on outdated section, distributors not liable. Appeals allowed.

The tribunal set aside the differential duty demand under Sec.11A, as the show cause notice was based on an old section and the transactions were at a transaction value with appointed distributors. The demand under Sec.11D was also set aside since distributors were not liable to pay duty. All demands under Sec.11A and Sec.11D, including interest and penalties, were overturned, and the appeals were allowed, leading to the impugned order being set aside.

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Issues:
- Differential duty demand under Sec.11A
- Demand under Sec.11D
- Interest, penalties, and invoking extended period of limitation

Differential duty demand under Sec.11A:
The appellant, a pharmaceutical company availing SSI exemption, participated in a tender to supply medicines to hospitals. The revenue issued a show cause notice demanding differential duty for undervaluing goods. The adjudicating authority confirmed the demand under Sec.11A, partially allowed the claim under Sec.11D, and imposed interest and penalties. The first appellate authority upheld the demand under Sec.11A and penalties but set aside the penalty under Sec.11D. The appellant argued that the show cause notice was based on an old section of the Central Excise Act and that the transactions were at a transaction value with appointed distributors. The department argued that the distributors were a sham to evade duty, but the tribunal found the demand under Sec.11A unsustainable due to the misapplication of the old section and upheld the appellant's arguments regarding transaction value.

Demand under Sec.11D:
The revenue alleged that distributors collected amounts as excise duty and should deposit it under Sec.11D. The department argued that the distributors were appointed to evade duty. The tribunal found that prior to 2008, only persons liable to pay duty had to deposit collected amounts, and since the allegation was against distributors who were not liable to pay duty, the demand under Sec.11D did not sustain. The tribunal set aside the demand under Sec.11D, interest, penalties, and penalties on the Managing Director.

Interest, penalties, and invoking extended period of limitation:
The adjudicating authority imposed interest under Sec.11AB and Sec.11DD, along with penalties under Sec.11AC. The first appellate authority upheld penalties but set aside one penalty. The tribunal set aside all demands under Sec.11A and Sec.11D, including interest and penalties, and allowed the appeals, concluding that the impugned order be set aside.

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