Judgment:
1. The appeal is directed by the applicant against the order of the Commissioner dated 8-10-2003 by which the Commissioner directed recovery of Rs. 43,24,933/- from the applicant under Section 11D of the Central Excise Act, 1944 against which an amount of Rs. 3,45,995/- already paid by the applicant was to be adjusted. Penalty of Rs. 1,000/- was also imposed on the applicant under Rule 210 of the Central Excise Rules, 1944 read with Section 38A of the Act.
2. The applicant has sought stay of the impugned order on the ground that at the time of clearance of Lay Flat Tubing, the applicant had paid the amount of duty at 8% which was now being demanded and the provisions of Section 11D did not apply since the said provisions could be invoked only when the amount collected from the buyers had not been paid to the Government. The learned Counsel for the appellant contended that in view of the rubber stamp put on the invoices to the effect that the amount was reversed under Rule 57AD and the Modvat was not to be taken, it was clear that the amount was not collected by way of excise duty and, therefore, the provisions of Section 11D of the Act were inapplicable in the present case. The learned Counsel also submitted that the issue as to whether the provisions of Section 11D could be invoked in such cases, has been referred to a Larger Bench and, therefore, we should await the outcome of that reference. It appears that by order dated 23-2-2004 in Appeal No. E/1541/2003-Mum., the issue as to whether the amount of 8% debited from RG-23A Part-II in terms of the provisions of Rule 57CC(1) and collected from the customers was required to be deposited with the Government in terms of provisions of Section 11D of the Central Excise Act, has been referred to a Larger Bench.
3. The invoices bear a rubber stamp which reads "Amount reversed Under Rule 57AD Modvat not to be taken". It is not clear as to when this rubber stamp was put. The contents of these invoices clearly indicate that the amount of 8% which charged and was not reversed. The invoices show that in the column of excise duty the rate of 8% was stated. The amount of excise duty payable at that rate is worked out and shown in the column of total excise duty. At the bottom of the invoices, there is again mention of the excise duty amount in words and figures. It is thus clear that the amount of excise duty at the rate of 8% was charged from the customers by the applicants under all these invoices. It is not shown whether original invoices bear the said rubber stamp.
4. According to the learned Counsel for the applicant, 'nil' duty was payable on the final products, and, therefore, credit in respect of such inputs could not be claimed by the applicant. Whether the applicant was entitled to claim credit in respect of the inputs is altogether different aspect of the matter. Irrespective of the entitlement to such credit, the issue whether the applicant had charged any amount by way of excise duty under the invoices is required to be examined. Whether the Cenvat amount which was claimed was reversed or not had no bearing on the question of charging of excise duty at the time of removal of goods, because admittedly, there was 'nil' duty payable on the products. Prima facie, the applicant had recovered the amount by way of excise duty from the customers and, therefore, Section 11D could be invoked. The fact that similar issue is pending before a Larger Bench, is no ground for awaiting its outcome and not making an order on the stay application. Moreover, the nature of the invoices in the present case clearly indicate that the applicant had at various places in the invoices stated that the amount was being charged from the customers by way of excise duty. Since admittedly no excise duty was payable, Section 11D comes into play and pendency of similar issue cannot, by itself, operate as stay other matters having different nature of invoices. The petitioner has, therefore, failed to make out any prima facie case for interim relief. The application is therefore rejected.
5. If the petitioner deposits the amount payable under the impugned order within eight weeks from today, the appeal will be posted for final hearing in its due course. Compliance is to be reported on 31-8-2005 failing which the appeal will stand dismissed.