At, Customs Excise Service Tax Appellate Tribunal Regional Bench Allahabad
By, THE HONORABLE JUSTICE: ASHOK JINDAL
By, MEMBER AND THE HONORABLE JUSTICE: ANIL G. SHAKKARWAR
For Petitioner: Atul Gupta, Advocate And For Respondents: Mohd. Altaf, Asstt. Commr. (A.R.)
1. Appellant is in appeal against the impugned order wherein the demand of duty has been confirmed by invoking section 11D of Central Excise Act, 1944 and some of the demands also has been confirmed on intermediate product which emerges during the course of manufacturing of their final product which is ultimately exempt from payment of duty.
2. The facts of the case are that the appellant is manufacturing Printed Laminated Polyester film and Metalized Polyester films and clearing on payment of duty. The appellant is also availing Cenvat credit on inputs as inter-mediate product. Appellant collected a sum of Rs. 12,15,086/- from the custo
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mer and that should be deposited in terms of Section 11D of the Central Excise Act, 1944. Equivalent amount of penalty was also imposed on that account. It was also held that since metalized laminated films are not dutiable, therefore, credit taken on inputs is required to be reversed. As during the relevant period, the appellant used granules to manufacture polythene films which in turn, was used for manufacture of laminated polyester films on which they were paying duty and consequently the said product held to be exempted therefore in terms of Notification No. 67/95 the benefit is not available.
Consequent to the decision of the Hon'ble Apex Court, the final product was not dutiable, the appellant is required to pay a sum of Rs. 17,05,242/- towards duty on the said polyester and polythene film therefore, it was held that the appellant is required to pay duty toward duty on polythene film and credit was denied on laminated rolls and metalized polythene film. The show cause notices was issued to the appellant. Adjudication took place and demand was confirmed on account of utilizing of Cenvat credit on polythene film used for metalized polyester film and laminated film on which duty has been collected under Section 11D of the Act was also held to be paid. Aggrieved from the said order, the appellants are before us.
3. The Ld. Counsel for the appellant submits that in their own case for the earlier period this Tribunal has decided the issue in favour of the appellant as reported in : 2015 (324) ELT 411 (Tri.-Del.), therefore impugned order is to be set aside.
4. Heard the parties and considered the submissions.
5. We find that in appellants own case reported (supra) this Tribunal has examined the issue as under:-
8. We are dealing with each Issue separately:
i. To deal with the first issue we find that the contention of the appellant is that they have cleared these metalized/laminated films on payment of duty. That fact has been recorded by the Adjudicating Authority in the impugned order in para 65.14 where he has recorded that in defense it is pointed out that they have not collected any amount from their customers instead they have collected duty of excise and deposited the same to the Government Account. Further, in para 65.15 it is recorded by the Ld. Commissioner that I find that amount collected by M/s. LIPL against the above said clearances has not been collected and is required to credited to the Central Government in terms of provision of section 11D of the Act. In para 65.16 he further recorded that it is further noticed that M/s. LIPL has utilized Cenvat Credit so availed towards making payment of amount charged from their customers as Central Excise Duty.
When the findings of the Ld. Commissioner in the impugned order is clear that the appellant has made a payment of Central Excise duty which have been recovered from the customers. Therefore, the question of demanding the amount under section 11D of the Act does not arise. Further, we find that during the relevant period section 11D was as under:
Section 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 Central Government.
On plain reading of the said provision, it is very much clear that every person who is liable to pay duty under this Act or Rules made thereunder has collected any amount in excess of duty assessed or determined is required to pay to the Central Government amount so collected. As per the show cause notice, the allegation of the Revenue is that as the activity of the appellant does not amount to manufacture therefore, the appellant is not liable to pay duty. Therefore, the provisions of Section 11D of the Act are not applicable to the facts of this case. Although the appellant has paid to the Central Government what amount is collected from the customers as duty, therefore, the demand under Section 11D of the Act is not sustainable. Consequently, interest is also not payable.
iii. Issue No. 3 is whether demand on polythene film manufactured and captively consumed can be confirmed against the appellant or not. Definitely the appellant is required to pay duty on captively processed goods which are liable for duty. But we should not forget the fact that the final product which does not amount to manufacture has been cleared by the appellant on payment of duty. Therefore, the said payment of duty shall amount to payment of duty on captively consumed product i.e. polythene film. In these terms, the demand of Rs. 75,80,380/- is not sustainable. Accordingly same is set aside.
6. As both the issues has been decided in favour of the appellant holding that as the appellant has paid duty on their final product therefore the said amount cannot be recovered twice under section 11D of the act. Further, as appellant is discharging duty on final product therefore although same is exempt, but in terms of the decision of the Hon'ble High Court of Bombay in the case of Commissioner of Central Excise, Pune-III v. Ajinkya Enterprises : 2013 (294) ELT 203 (Bom.)] the demands are not sustainable.
7. In view of the above, the impugned order is set aside. The Appeal is allowed with consequential relief.
(Dictated and pronounced in the court.