TaxTMI 
TaxTMI 
2006 (6) TMI 289
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..... Show Cause Notices have been issued proposing to demand the amount paid under Rule 57CC to the Government and collected from the buyers under Section 11D of the Central Excise Act, 1944. The contention of the Revenue is that the amount of 8% representing excise duty has been collected from the buyer and, therefore, the said amount is to be paid to the Government under Section 11D of the Central Excise Act, 1944. The adjudicating authorities confirmed the proposals in the Show Cause Notice. The Commissioner (Appeals) confirmed the order passed by the adjudicating authority. The impugned Orders are strongly challenged by the appellants. 2. S/Shri G. Shiva Dass and Anil Kumar B., Ramesh Ananthan, the learned Advocates appeared for the appellants and Shri R.K. Singla, the learned JCDR for the Revenue. 3. The learned Advocates S/Shri G. Shiva Dass and Anil Kumar B., urged the following points:- (i) Demand under Section 11D will arise only if the person liable to pay the amount has not paid it to the Government but has retained the same with him. In the present case, the amount has actually been paid to the Government either from the PLA or from the Cenvat accou....
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.... - 2004 (165) E.L.T. 257(SC) has held when a Circular is erroneous, it cannot bind the assessee, who can argue that it is erroneous. (vi) In terms of Section 11D(1) of the Central Excise Act, 1944, every person who is liable to pay duty under this Act and collects an amount in excess of the duty assessed or determined and paid on any excisable goods, in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government. The above provisions, therefore, contemplate a situation where a manufacturer is liable to pay duty but actually collects an amount representing duty in excess of what he has actually paid to the department. Each of the condition above have been examined and settled in various decisions as explained below. Condition No. (a) The Hon'ble Tribunal in the case of CCE v. Perfect Refractories reported in 2001 (127) E.L.T. 304 has held that in a situation where the assessee is not liable to pay any duty at all, the collection of an amount describing them as surcharge in addition to the price of the goods, cannot be considered as a collection representing excise duty payable on the goods warrant....
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....ing excise duty at the time of selling the said goods. There has to be a further assessment of the duty payable determining the excise duty actually payable etc. This position has been explained in the case of Bipranil Industries Limited v. Commissioner of C.Ex., Bangalore reported in 2002 (144) E.L.T. 391. The reference application filed by the Revenue has been rejected by the Hon'ble High Court of Karnataka which has approved the decision of the Tribunal. (vii) The Appellants submit that in this case, the department while raising the demand has calculated the amount of 8% on the amount of 8% also paid to the department. The Appellants submit that this method is incorrect as the Rule clearly envisages that the amount of 8% is to be calculated on the sale price agreed between the parties and not on the total realisation from the customer. Once the amount of 8% is calculated on the sale price, then a further calculation of 8% does not arise as such a calculation will be endless. In fact such a calculation would mean either altering the sale price or demanding an amount of 8-64% on the sale price both of which is beyond the scope of Rule 57CC. 4. Shri Ramesh Ana....
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....unt has been collected as Excise duty. Therefore, the Revenue contends that Section 11D is attracted and the amount collected, representing Excise Duty, has to be paid to the Government. 6.2. We find that the appellants complied with the requirement of reversing an amount of 8% of the sale value of the exempted goods in accordance with Rule 57CC/57AD of CE Rules and Rule 6 of Cenvat Credit Rules. Even though, the amount of 8% was collected from the buyers, that amount has not been retained with them. It is not the case of the department that the appellants collected an amount in excess of the amount of 8% payable to the Government. There is also no provision in the Central Excise Law debarring the appellants from collecting the amount of 8% from the buyers. This stand is taken in the following decisions cited supra. (i) Nu-Wave Shoes v. CCE, New Delhi (ii) CCE v. Pennar Industries Ltd. However, contrary view was taken in the following decisions cited by the learned JCDR : (i) Vimal Moulders (I) Ltd. v. CCE, New Delhi (ii) P.T. Steel Industries v. CC, Ahmedabad T....