Reimbursement of Cenvat reversal is not excise-duty collection where contractual terms establish its true character.

Reimbursement by a buyer of an amount reversed on exempt clearances under the Cenvat Credit Rules is distinguished from an amount collected as excise duty. The notes explain that exempt goods carry no excise-duty liability, while statutory records and ER-1 returns may establish reversal of the prescribed amount under the Cenvat scheme. Where the underlying agreement characterises the buyer's payment as reimbursement of that reversal, an invoice entry in the excise-duty column does not alter its legal character. On this analysis, the provision governing amounts collected as representing excise duty does not apply to such reimbursement.

---

---

Issues: Whether reimbursement recovered from a buyer for the amount reversed under Rule 6(3)(a)(i) of the Cenvat Credit Rules, 2004, though shown in the invoice's excise-duty column, constitutes an amount collected as representing excise duty under Section 11D of the Central Excise Act, 1944.

Analysis: The exempt goods carried no excise-duty liability. The statutory records and ER-1 returns established that the prescribed percentage of the value of exempt clearances had already been reversed under Rule 6(3)(a)(i). The agreement specifically provided for the buyer to reimburse that reversal, demonstrating that the payment was not intended or understood as excise duty. The invoice description could not override the transaction's real legal character. Section 11D targets retention of amounts collected by falsely representing them as excise duty; it did not apply to a reimbursement of an amount already reversed and accounted for under the Cenvat scheme.

Conclusion: The reimbursement was not collected as representing excise duty, and Section 11D of the Central Excise Act, 1944, was inapplicable.

---