Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Central Excise vs Tapi R.C.C., M.K. Kotecha, Sakri Cement ... on 19 October, 2004
Equivalent citations: 2005(186)ELT107(TRI-MUMBAI)
ORDER Moheb Ali M., Member (T)
1. These appeals directed against the order of Collector of Central Excise Aurangabad are filed by the Revenue. In the impugned order the Collector dropped the demand for Rs. 21,74,963/- made Under Section 11D of the Excise Act as unsubstantiated. Since the Collector dropped the demand raised against the Proprietor KM. Kotecha, Contractor & Engineer who owned three firms, the Revenue filed these four appeals.
2. Briefly the facts are that the respondents are manufacturers of RCC and PSC pipes. They supplied the said goods to various societies for the lift irrigation scheme under works contract. The respondents cleared the goods either at 'Nil' rate of duty or at a concessional rate of duty applicable to SSI units under Notification No. 175/86 as amended. The allegation in the show cause notice is that while the respondents paid 'Nil' duty or concessional rate of duty they collected full duty from the recipients of the goods and retained the same without depositing such excess collection representing duty as required Under Section 11D of the Central Excise Act.
3. The Collector dropped the demand on the following grounds : (a) The respondent has not raised any bill on the principal showing excise duty separately; (b) There is no evidence to say that the respondents have taken full rate of duty while costing their product (c) Section 11D is specific that only such amounts representing duty collected from the buyers has to be deposited with the Government. The Bills raised by the respondents do no support that any such amount is separately shown and collected.
4. The Revenue contends that the respondents did take the full duty into consideration while estimating the cost of this product even when they discharged either nil duty or duty at concessional rate under the exemption Notification applicable to SSIs; that the Commissioner erred in holding that the Revenue's stand that extra amounts representing Central Excise duty was collected was based on surmises; that details of Rate Analysis Statement shows the break up of tender value for each item of work; in column 6 of the Rate Analysis Statement excise duty @ 12% is shown as it is on the basis of this R.A. bills payment is made to the assessee; that the Commissioners' contention that itemized bills showing separate quantum of Central Excise duty are not produced by the department is not correct in the light of the R.A. bills, that Shri Kotecha had received full payment of Central Excise duty as effective rate and hence demand is based on facts and that the demand made Under Section 11D is sustainable.
5. Heard both sides.
6. The undisputed fact in the present case is that the respondent did not raise any invoice to his customer indicating Central Excise duty at a particular rate. The Revenue's case is that the respondent's contract price included the excise duty and as such it has to be concluded that the. respondents have collected the duty amount from their principals. On the other hand the respondents contend that the contracted value agreed upon by both the parties was inclusive of excise duty and the respondents" customers were not concerned whether the contractor paid Nil rate of duty or concessional rate of duty. The Revenue appears to be laying a lot of emphasis on R.A. Bill raised by the respondent on the principals. It is true that the bills raised by the respondent took into consideration all costs including excise duty payable. But that in itself does not mean that Central Excise duty is shown and charged separately. The provisions of Section 11D say that the amounts which an assessee collects from his customers representing duty of excise is required to be deposited by him to the credit of Central Government. Evidence has to be brought on record to show that there was a collection of certain amount representing duty. No such evidence exists in this case.
7. The Tribunal in the case of Poddar Industrial Corporation v. Commissioner of Central Excise, Patna [2003 (158) ELT 473 (Tri.Kolkata) dealt with a similar situation. The facts are almost Para materia with the present case. The Tribunal in that case following the ratio laid down in National Organic Chemical Industries Ltd. v. Commissioner of Customs [2000 (115) ELT 70], held that in a case of this type demand Under Section 11D cannot be upheld. Following the ratio of this decision and for the reasons given above we reject the appeal of the Revenue.
8. Revenue's appeal is rejected.
(Pronounced in Court)