Section 11D could not be used to recover excess duty on stock transfers where no sale was shown and payment was already made.

Section 11D of the Central Excise Act was held inapplicable to excess duty collected on stock transfer clearances to a sister concern because the provision applies where duty is collected from a buyer in the guise of duty, and no sale to a buyer was shown. The Tribunal also held that recovery could not survive once the collected amount had already been deposited with the Government, as nothing remained outstanding for recovery under Section 11D(2). The impugned demand was therefore unsustainable and the orders were set aside.

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Issues: (i) Whether Section 11D of the Central Excise Act, 1944 could be invoked for excess duty collected on inputs cleared on stock transfer basis to a sister concern when the clearances were not by way of sale. (ii) Whether the demand could survive when the excess amount collected had already been paid to the Government.

Issue (i): Whether Section 11D of the Central Excise Act, 1944 could be invoked for excess duty collected on inputs cleared on stock transfer basis to a sister concern when the clearances were not by way of sale.

Analysis: Section 11D applies where a person liable to duty collects an amount in excess of the duty payable from the buyer of excisable goods in the guise of duty. The clearances in question were on stock transfer basis to a sister concern, and the Tribunal treated the absence of a sale to a buyer as material. The provision was therefore found inapplicable on these facts.

Conclusion: Section 11D could not be invoked against the assessee on the stock transfer clearances.

Issue (ii): Whether the demand could survive when the excess amount collected had already been paid to the Government.

Analysis: The Tribunal held that Section 11D is meant to recover amounts not already credited to the Government. Since the amount collected from the sister concern had already been deposited with the Government, no amount remained outstanding for recovery under Section 11D(2). The impugned demand was therefore unsustainable.

Conclusion: The demand could not be sustained because the amount had already been paid to the Government.

Final Conclusion: The impugned orders were set aside and the assessee obtained relief from the demand raised under Section 11D.

Ratio Decidendi: Section 11D can be invoked only where excess duty is collected from a buyer and remains unpaid to the Government; it does not apply to stock transfer clearances where no sale is shown, and it cannot support recovery of an amount already deposited with the Government.

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