TaxTMI 
TaxTMI 
2008 (5) TMI 533
X X X X Extracts X X X X
X X X X Extracts X X X X
....le fibre yarn (VSF Yarn, for short) cleared during the period 12/2001 to 2/2002 in terms of exemption Notification No. 3/2001 dated 1-3-2001. The substantive condition of the above Notification was that the manufacturer of VSF yarn did not avail CENVAT credit of duty paid on the raw materials used in the manufacture of VSF yarn. Shri Raja, however, collected an amount equivalent to the CENVAT credit not availed on the raw materials from the buyers of VSF yarn describing this amount as excise duty in the sale invoices covering VSF yarn. Sri Raja issued credit notes to its buyers for the amount collected as duty in the connected invoices. After due process of law proposing to recover the above amount under Section 11D of the Central Excise Ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... light of the judgment of the Bombay High Court there was an error in the final order which has to be rectified. The learned consultant has also relied on the decision of the Tribunal in CCE, Madurai v. N.V.K. Mohd. Sultan Rowther & Sons - 2008 (223) E.L.T. 276 (Tri.-Chennai). 3. Heard both sides. Learned consultant for the appellants submits that Section 11D is not attracted to the present case as the provisions applied when the assessee collected duty in excess of the amount assessed on the final product. In the instant case, the amount collected was duty foregone on the inputs. I find that the consultant's reliance on the decision of this Tribunal in CCE, Madurai v. N.V.K. Mohd. Sultan Rowther & Sons - 2008 (223) E.L.T. 276 (Tri.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... I have studied the case records and the rival submissions. The appellants returned the excess amounts collected from its buyers in April 2002 itself whereas, the show cause notice was issued in May 2005. As there is no evasion of duty involving suppression of facts, collusion or fraud, the penalty imposed under Section 11AC is not sustainable. In the Sangam Processors (Bilwara) Ltd., (supra), the Tribunal had dealt with a claim for refund of duty filed in 1986 and where the claimants had returned the amounts of duty by issuing credit notes on 26-12-1988. The Tribunal observed that the duty incidence passed on could not be remedied by issue of credit notes to customers. 5.1 The Tribunal made following observations in Sangam Pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o the customers at the time of clearance the assessee can still claim refund under Sec. 11C(2) of Central Excises and Salt Act by issuing credit notes'. 5.2 The ratio of the above decision is that excess duty collected by the assessee at the time of clearance of the goods cannot be allowed as refund if the same is returned later on through credit notes to the buyer of the goods. In other words by returning the excess duty to the buyer, the assessee does not become entitled to refund and the same remains with the Government. An amount collected as duty has to be deposited with the Government in terms of Section 11D of the Act. If the amount is not deposited, the same can be recovered. Recovery of such amount due to the Government can....