Section 11D applies only to duty actually collected from buyers, not to notional Modvat credit or passed-on burden.

Section 11D applies only where an assessee has actually collected from the buyer an amount representing excise duty. Mere passing on of the duty burden, or the taking of notional Modvat credit on inputs under Rule 57B, does not satisfy that statutory requirement. On the facts, no amount was collected from the buyer as excise duty, so the precondition for invoking Section 11D was absent. Recovery of the notional Modvat credit was therefore unsustainable, and the demand was set aside.

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Issues: Whether Section 11D could be invoked to recover notional Modvat credit taken on inputs when no amount was collected from the buyer as excise duty.

Analysis: Notional Modvat credit under Rule 57B was an incentive mechanism permitting credit of the duty element that was deemed to have been foregone because of exemption. Section 11D applied only where a person had collected from the buyer an amount representing excise duty. The essential conditions were collection from the buyer and representation of the amount as duty. On the facts, the appellant had not collected any such amount from the buyer, nor had it collected any amount as excise duty. The finding that the duty burden was passed on to the buyer was irrelevant for this provision.

Conclusion: Section 11D did not apply, and recovery of the notional Modvat credit was unsustainable.

Final Conclusion: The demand was set aside and the assessee obtained relief.

Ratio Decidendi: Section 11D is attracted only when an amount is actually collected from the buyer as representing excise duty; a mere passing on of duty burden or the taking of notional Modvat credit does not satisfy that statutory requirement.

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