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2016 (5) TMI 896 - CESTAT KOLKATA

2016 (5) TMI 896 - CESTAT KOLKATA - TMI - Whether amounts paid under Rule 6(3)(b) of the CENVAT Credit Rules, 2004 can be demanded under Section 11D of the Central Excise Act, 1944 when such amounts paid by the appellant are reimbursed by the Indian Railways Board - Held that:- in view of the decision of Larger Bench in the case of Unison Metals Ltd. Vs. CCE, Ahmedabad -I [2006 (10) TMI 171 - CESTAT, NEW DELHI] which was accepted by the Department as per CBEC Circular No. 870/8/2008-CX dated 16/ .....

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v Bagaria, Advocate For the Respondent : Sri S. Mukhopadhyay, Supdt. (A.R. ORDER PER SHRI H.K. THAKUR This Appeal has been filed by the appellant against Order-in-Original No.3/COMMR/CE/Kol-III/2007-08 dated-22/05/2007 under which a demand of ₹ 3,10,14,076/-(Central Excise Duty) and ₹ 2,97,964/- (Education cess) has been confirmed by the adjudicating authority under Section 11D and 11DD of the Central Excise Act, 1944. 2. Shri J.P. Khaitan (Senior Advocate) , Shri Ghorawal ( Advocate .....

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ogies are exempted amounts under Rule 6 (3) (b) of the CENVAT Credit Rules/Rule 57CC of the Central Excise Rules, were paid by the appellant.That such reversal of amounts under Rule 6 (3) (b) are specifically shown on the invoices raised by the appellant to the Railways as per the contract. That the amounts so paid are reimbursed by the Railways to the appellant which department is demanding under Section 11D/11 DD from the appellant. It is the case of the appellant that as per communication dat .....

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paid. That with respect to non-composite units the question of payment under Section 11D of the Central Excise Act, 1944, was settled by this Bench in the case of Bridge and Roof Co. (India) Ltd. Vs. CCE, Kolkata-II reported in 2008 (225) ELT 531 (Tri.-Kolkata), under which it was held that reimbursement of the excise duty paid on bogies/couplers, supplied to Indian Railways, cannot be confirmed under Section 11D of the Central Excise Act. 2.1 Ld. Sr. Advocate relied upon the Larger Bench decisi .....

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lso made the Bench go through para 2 of CBEC Circular No. 870/8/2008-CX dated 16/5/2008 to argue that Larger Bench decision in the case of Unison Metal Ltd. Vs. CCE, Ahmedabad-I has been accepted by the Department. 3. Shri S. Mukhopadhyay, Supdt. (A.R.) appearing on behalf of the Revenue reiterated the stand taken by the Adjudicating authority.It was also submitted that CBEC Circular dated 16/5/2008 was not available before the adjudicating authority when Order-in-Original dated 22/05/2007 was p .....

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following observations in para 8 & 9 of this case law which is reproduced below: 8. In the present case, it is not in dispute that the assessees had paid 8% of the value of the goods in terms of Rule 57CC at the time of removal of the goods from the factory. The amounts so paid are the amounts recovered by them from their buyers. Thus, in the present cases, no amounts collected from the buyers remain unpaid to the revenue, irrespective of whether those amounts were represented in the sales d .....

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. This was the view that Division Bench took in the case of Nu-Wave shoes. We may read the relevant part of that order: Admittedly, Rule 57CC(1) is applicable in the present case. It is not the case of the Department that the assessees have been charging an amount over and above 8 of the price of the exempted variety of footwear from their customers and in fact, the show cause notice proceeds on the basis that only the amount reversed by debit in the credit account from 1-9-1996 to April, 1997 h .....

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as provided under Section 11D of the Central Excise Act. Hence the charge of contravention of the provisions of Section 11D is not sustainable. Accordingly, we set aside the impugned order and allow the appeal. We find that the above view taken by the Tribunal is in conformity with the judgment of the apex Court in the case of Mafatlal Industries, that repeat payment of excise duty is not contemplated. We read para 97 of that judgment [Mafatlal Industries Ltd. - 1997 (89) E.L.T. 247 (S.C.)]: Mea .....

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the section which provide for payment of duty twice over. All that the section says is this: the amount collected by a person/manufacturer from the buyer of goods as representing duty of excise shall be paid over to the State; even if the tax collected by the manufacturer from his purchaser is more than the duty due according to law, the whole amount collected as duty has to be paid over to the State; if on the assessment being made it is found that the duty collected and paid over by the manufa .....

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f Section 11D. These may be case where goods are removed/cleared without effecting their sale. In such a case Section 11D is not attracted. It is attracted only when goods are sold. The purport of this section is in accord with Section 11B and cannot be faulted. 9. The scheme of Central Excise duty payment is that a manufacturer removed goods from the factory of production after payment of duty. While selling the goods, the manufacturer recovered the duty so paid. In doing so, an assessee is rec .....

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