Obligations of persons who have collected excise duty from buyers [Section 11D] :
1. Section 11D(1) makes it obligatory on every person who is liable to pay duty and has collected any amount from the buyer of any goods in any manner as representing duty of excise to pay the amount so collected to the credit of the Central Government. Sec.11D gets attracted only when goods are sold and not otherwise (Eternit Everest Ltd vs UOI 1996 (89) ELT 28 (Mad).
2. Every person, who
- has collected any amount in excess of the duty assessed or determined and paid on any excisable goods or
- has collected any amount as representing duty of excise on any excisable goods which are wholly exempt or are chargeable to nil rate of duty;
from any person in any manner, shall forthwith pay the amount so collected to the credit of the Central Government [Sub-section 1A].
3. Where any amount is required to be paid to the credit of the Central Government under sub-section (1) or sub-section (1A) and which has not been so paid, the Central Excise Officer may serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government [Sub-section (2)].
4. The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under sub-section (2), determine the amount due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amounts so determined [Sub-section (3)].
5. The amount paid to the credit of the Central Government under sub-section (1) or subsection (1A)] or sub-section (3) shall be adjusted against the duty of excise payable by the person on finalisation of assessment or any other proceeding for determination of the duty of excise relating to the excisable goods referred to in sub-section (1) or sub-section (1A) [Sub-section 4].
6. Where any surplus is left after the adjustment under sub-section (4), the amount of such surplus shall either be credited to the Fund or, as the case may be, refunded to the person who has borne the incidence of such amount, in accordance with the provis ions of section 11B and such person may make an application under that section in such cases within six months from the date of the public notice to be issued by the Assistant Commissioner of Central Excise for the refund of such surplus amount [Sub-section 5].
Note: Section 11D will operate only if any amount has been collected from the buyer as
representing duty of excise. If the duty collected is not deposited it becomes an offence.
Section 11D does not apply to amount paid under rule 6 of the CENVAT Credit Rules, 2004: Provisions of section 11D do not apply to ‘amount‘ paid under rule 6 of the CENVAT Credit Rules, 2004 even if the amount is recovered from the buyers. This is because section 11D applies to excise duty and what is paid under rule 6 of CCR is not the duty but an ‘amount‘. For the same reason, the CENVAT credit of the said amount cannot be taken by the buyer. Therefore, the said amount should be shown in the invoice as “amount paid under rule 6 of the CENVAT Credit Rules, 2004” [Circular No. 870/08/2008-CX dated 16.05.2008].