TMI Blog2014 (5) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is no question of the applicability of Section 11D. Conditions precedent for invoking Section 11D have not been satisfied. Section 11D( 1) has specific reference to a person who is liable to pay duty under the Act. In the present case it is Hindalco which is that person. Hindalco's liability to pay duty is in respect of the aluminium manufactured by it inasmuch as a duty of excise is a duty on manufacture and not on the sale of any product. Insofar as aluminium is concerned the price charged for it is by virtue of the Aluminium Control Order. The duty leviable on aluminium based on such price has been collected and paid by Hindalco . There is no excess on this account. Therefore, the question of invoking Section 11D would not arise - Decided in favour of assessee. - W. P. (C) No. 1175/1994 - - - Dated:- 23-4-2014 - Badar Durrez Ahmed And Siddharth Mridul,JJ. For the Appellants : Mr. Parag P. Tripathi , Sr. Adv. with Mr. Ajay Bhargava For the Respondents : Mr. Satish Kumar and Ms. Meera Bhatia. JUDGMENT Badar Durrez Ahmed, J (Oral) 1. In this writ petition there is a challenge to the constitutional validity of Section 11D of the Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndalco ) are engaged in the Manufacture of Aluminium and articles thereof (hereinafter referred to the said goods) falling under estwhile T.I. 27 of the 1st Schedule to the Central Excise Salt Act, 1944. (Now Chap. 76 of C.E.X. T.A. 85). 1. Whereas the said M/s Hindalco Purchased electricity from U.P.S.E.B. as well as from M/s Renusagar Power Co. Ltd. Renusagar Distt . Sonabhadra (hereinafter referred to Renusagar ) for the manufacture of Aluminium and articles thereof. 2. Whereas duty on electricity was imposed during the period from 1.3.78 to 30.9.83 (hereinafter referred to as the relevant period) at the rate set out in erstwhile T.I.11-E of the Ist schedule to the Central Excise and Salt Act, 1944. 3. And whereas during the relevant period the sale of Aluminium and articles thereof were regulated under the said order and the price of indigenous Aluminium was fixed by the Controller appointed by the Central Govt. for the purposes of the said order having regard to all relevant factors including the estimated cost of production or manufacture thereof and whereas only one price was fixed for one specification of indigenous Aluminium for all the manufacturers in India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 59.37 lacs to the credit of Central Govt. as contemplated under the provision of Section 11 D of Central Excises and Salt Act, 1944, with in 10 days of the receipts of this notice failing which they would be liable to action under rule 230 of the Central Excise Rules, 1944. If aggrieved by this notice they should appear before the undersigned within 7 days of the receipt of this notice. Sd /- (A.R. Bose ) Assistant Collector, Central Excise, Mirzapur , Copy forwarded to: 1. 1. The Collector of Central Excise , Allahabad, for information. 2. The Superintendent Central Excise , Range-1, Renukoot , for information necessary action. Assistant Collector. 5. On going through the said demand notice it is evident that the Department is invoking the provisions of Section 11D of the said Act on the ground that when the price of aluminium was fixed it included a component of excise duty on electricity. Since Renusagar was exempted from paying excise duty by virtue of the said decision of 1993, the amount which was embedded in the price of aluminium and which allegedly represented the excise duty on electricity, became surplus in the hands of the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration, it would apply in the facts of the present case because the decision of the High Court came in 1993 whereby the exemption sought by Renusagar Power Company was upheld and it is then that the amount representing the excise duty element on electricity became surplus in the hands of Hindalco . Therefore, clearly, according to Mr Satish Kumar, Section 11D, even if it was regarded as having prospective operation, would, in any event, apply. In response, Mr Tripathi submitted that first of all Section 11D does not have retrospective operation. It was introduced prospectively w.e.f . 20.09.1991. It is his submission that even if an amount as recognized under Section 11D had been collected a day prior to 20.09.1991 the same could not be recovered under Section 11D as the said provision came into operation only on 20.09.1991. He further submitted that several amendments have been introduced in Section 11D such as in sub-Section (1) and sub-Sections (2) and (3). Sub-section (1) of Section 11D was amended by insertion of certain words in the year 2000 but the amendment was to take retrospective effect from 20.09.1991. Similarly, sub-Sections (2) and (3) were inserted in the year 2000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of Section 11B and held that it would apply prospectively it also observed that Section 11D also came into force on 20.09.1991. Therefore, the plea of retrospectivity taken by the learned counsel for the Department cannot be accepted. 11. Finally, Mr Tripathi submitted that the petitioner would, in any event, not be covered under Section 11D. Before we examine his submission and the counter point taken by Mr Satish Kumar, it would be appropriate to set out Section 11D in its entirety. The said Section reads as under:- 11D. Duties of excise collected from the buyer to be deposited with the Central Government. (1) Notwithstanding anything to the contrary contained in any order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder, every person who is liable to pay duty under this Act or the rules made thereunder, and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under this Act or the rules made thereunder from the buyer of such goods in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t should be representative of the duty of excise. In this context Mr Tripathi submitted that the petitioner manufactures aluminium. Excise duty is a duty on manufacture. Therefore, the excise duty liability of the petitioner would be the excise duty payable on aluminium . Insofar as the aluminium manufactured by the petitioner is concerned, the duty that was payable by the petitioner has been paid and there is no issue with regard to this. As such the petitioner has not collected any excise duty which the petitioner was liable to pay in excess of what the petitioner was assessed on in respect of the aluminium produced by it. Therefore, there is no question of the applicability of Section 11D. 13. Mr Satish Kumar, on the other hand, argued that the price for aluminium which the petitioner charged from its buyer in terms of the Aluminium Control Order included an element of excise duty paid on electricity consumed by it and, therefore, it may be inferred that the petitioner collected duty in excess of the amount that it was entitled to collect. Consequently, according to Mr Satish Kumar, the conditions precedent to Section 11D were squarely met and, therefore, the recovery could h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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