Excise penalty and interest provisions do not apply to excess buyer collections where no duty short-payment is shown.

Penalty under Section 11AC and Rules 173Q and 210, and interest under Section 11AB, were held inapplicable where there was no short levy or short payment of excise duty. The assessee had collected excess amounts from buyers and was required to deposit them under Section 11D, but that liability alone did not trigger the penal or interest provisions tied to duty non-levy, non-payment, short levy, or short payment. The penalty and interest demands were set aside, while the duty demand was upheld.

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Issues: Whether penalty under Section 11AC and Rules 173Q and 210, and interest under Section 11AB, were leviable where the assessee had collected an amount in excess of duty and was liable only to deposit that amount under Section 11D.

Analysis: Penalty under Section 11AC and interest under Section 11AB are attracted only where duty of excise has not been levied, has not been paid, or has been short levied or short paid. On the facts found, there was no short payment of duty; the assessee had merely failed to deposit the excess amount collected from buyers. Such amount was exigible under Section 11D, but that by itself did not justify penalty under Section 11AC or interest under Section 11AB. For the same reason, the penal provisions in Rules 173Q and 210 could not be invoked.

Conclusion: The penalty under Section 11AC and Rules 173Q and 210, and the demand of interest under Section 11AB, were not sustainable and were set aside. The duty demand was upheld.

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