Section 11D does not apply unless there is a collection of excise duty as represented in invoices.

PER : DR. D.M. MISRA

These two appeals are filed against Order-in-Original No.21//2016 dated 31.003.2016 passed by the Commissioner of Central Excise, Bengaluru.

2. Briefly stated the facts of the case are that the appellant is engaged in the manufacture of cement concrete interlock pavers / bricks and kerb stones falling under Chapter sub-heading 68079090 of Central Excise Tariff Act, 1985. On the basis of intelligence, investigation was initiated against the appellant by retrieving records and recording statements etc. It is alleged that the appellant are availing SSI exemption under Notification No. 8/2003-CE dated 01.03.2003 and during the period from November 2010 to December 2014 while availing SSI exemption up to the value of Rs.1.5 crores, the appellant had collected excise duty of Rs.66,83,256/- on the goods by raising commercial invoices indicating the price as inclusive of duty which was proposed to be recovered in terms of Section 11D (1A) of the Central Excise Act, 1944 . Also, on verification of the relevant invoices and purchase orders, it was noticed that though the condition of clearances of sale is on FOR basis, the appellant had not included the value of cost of delivery / transportation in the assessable value claiming the clearance as ex-factory thereby short paid excise duty of Rs.28,75,181/-; also it is alleged that they have not paid an amount of Rs.17,41,907/- for clearance of goods for the period October 2013 to December 2014. Consequently show-cause notice was issued to them for recovery of duty of Rs.66,83,256/- under Section 11D and Rs.25,75,181/- and Rs.17,41,907/- under Section 11(4) of the . On adjudication, the demand was confirmed with interest and penalty. Hence, the present appeals.

3.1. At the outset, the learned advocate for the appellant has submitted that the appellant is an SSI unit availing exemption on the aggregate value of first clearances of specified goods in the respective financial years up to Rs.150 lakhs as per the Notification No.8/2003-CE dated 01.03.2003. The appellant during the period of exemption neither in the excise invoice nor in the commercial invoice collected any amount representing as duty of Central Excise. The amount collected in the invoices was the agreed rate at which goods were sold, which is an all inclusive rate. The price agreed with their customers was on ex-factory basis, inclusive of excise duty wherever applicable. The term ‘inclusive wherever applicable’ in the purchase order indicates that the duty would be charged only after crossing the SSI exemption limit of Rs.150 lakhs. After exceeding the clearance value of Rs.150 lakhs in a financial year in invoices, the applicable excise duty on goods cleared is reflected and collected from the customers. Thus, no excise duty was collected during the exemption period and their customers were well aware of it. He has submitted that if the amount charged in the invoices during the exemption period is all inclusive and a cum- duty price, the provisions of Section 11D will not be attracted. It is his contention that unless and until an amount is collected as representing central excise duty in the excise invoices / statutory documents prescribed under Section 12A of the CEA , 1944 provisions of Section 11D cannot be invoked. In support, they have referred to the following judgments:

i. Everest Industries Ltd. Vs. CCE, Coimbatore [2019(369) ELT 1569 (Tri. Mad.)]

ii. Shree Shyam Pulp and Board Mills Ltd. Vs. CCE, Meerut-II [2018(364) ELT 205 (Tri. All.)]

iii. Todi Rubber Pvt. Ltd. Vs. CCE, Nagpur [2018(361) ELT 737 (Tri. Mum.)]

iv. CCGST Vs. Hindustan Petroleum Corporation Ltd. [(2023) 10 Centax 138 (Bom.)]

3.2. Further, he has submitted that the