JUDGMENT 1. Briefly stated the facts of the case are that a show cause notice dated 17th January, 2006 (Annex. 1) was issued to respondent by assessing officer i.e. Dy. Commissioner, Central Excise to the effect that as to why the amount of Rs. 29,342/- should not be recovered from it along with interest under the provisions of Rule 14 read with provisions of Sections 11A and 11AB of the Central Excise Act, 1944. It was also mentioned in the notice that wrongly utilised Cenvat credit of Rs. 28,219/- so collected from their customers in the guise of Central Excise duty be not recovered. 2. The Assessing Officer vide its order dated 22nd March, 2006 passed an order against assessee for recovery of Rs. 28,219/- collected from their customers in the guise of Central Excise duty from them in cash in terms of the provisions of Section 11D of the Central Excise Act, 1944. The Assessing Officer also imposed a penalty of Rs. 5,000/- under Rule 25 of the Central Excise Rules, 2002. 3. Being aggrieved with the aforesaid order, the assessee/respondent preferred an appeal, which was dismissed by the appellate authority vide order dated 28th June, 2006. Thereafter, the assessee preferred an appeal before Customs, Excise & Service Tax Appellate Tribunal, which was allowed vide order dated 5th August, 2008 [2009 (235) E.L.T. 81 (Tri. - Del.)]. Hence, Department has preferred this appeal before this Court. 4. This Court while admitting the appeal on 8th April, 2009 framed the following substantial question of law:- "Whether the Hon'ble CESTAT is correct in holding that the provisions of Section 11D of the Central Excise Act, 1944 are not applicable in the cases, where the assessee are engaged in the encashment of Cenvat credit by clearing the goods on payment of duty from Cenvat credit account, which are otherwise chargeable to NIL rate of duty?" 5. Submission of learned counsel for the appellant is that although the amount of Central Excise recovered by assessee has been deposited, but mode of deposit was not correct. The amount so far collected should have been deposited in cash, whereas the same was deposited by way of debiting the same from CENVAT credit account. He therefore, submitted that the deposit of amount by respondent was in contravention of Section 11D of the Act. Therefore, the Assessing Officer was right in passing an order of recovery. The amount so far collected should have been deposited in cash, whereas the same was deposited by way of debiting the same from CENVAT credit account. He therefore, submitted that the deposit of amount by respondent was in contravention of Section 11D of the Act. Therefore, the Assessing Officer was right in passing an order of recovery. He submitted that learned Tribunal has committed an illegality in setting aside the order passed by the Assessing Officer as well as appellate authority. 6. Learned counsel for the respondent defended the impugned order passed by the Tribunal and submitted that whatever amount was collected on account of Excise Duty from customers has been deposited. He submitted that the Department has also not disputed the deposit of the amount. The Tribunal has also recorded a finding of fact that excise amount recovered by assessee has been deposited with the department. He further submitted that so far as mode of deposit of recovered amount is concerned, the same was legal and justified. He submitted that in the facts and circumstances of the case Section 11D of the Act was not attracted. He also submitted that learned Tribunal has relied upon its Larger Bench's judgment in the case of Unison Metals Ltd. v. Commissioner of Central Excise, Ahmedabad-I reported in 2006 (204) E.L.T. 323 (Tribunal-LB) = 2006 (4) S.T.R. 491 (Tribunal-LB) , wherein the said mode of deposit of amount has been held to be legal. He also referred the Circular of the Department dated 11th August, 2002, wherein it has been reitrated that in the circumstances of the present case, the provisions of Section 11D are not attracted. 7. We have considered the submissions of learned counsel for the parties and examined the impugned order passed by Tribunal as well as other orders passed by the assessing officer and appellate authority. 8. The dispute in the present case is only in respect of recovery of amount of duty of Rs. 28,219/- and penalty of Rs. 5,000/-. 9. The sole question for determination in the present case is as to whether the amount of Central Excise recovered by assessee, where article was NIL rate of duty deposited by way of debiting the same from CENVAT credit account is correct or not? 10. There is no dispute in the present case between the parties that amount in question has already been deposited with the Department. 10. There is no dispute in the present case between the parties that amount in question has already been deposited with the Department. The objection of department is based on Section 11D of the Act. The said provision has been considered in detail by the Larger Bench of the Tribunal in Unison Metals Ltd. v. Commissioner of Central Excise, Ahmedabad-I (supra). 11. In this connection, it is relevant to refer the Circular dated 7th August, 2002, which is reproduced as under:- "Circular No. 651/42/2002-CX F. No. 267/72/96-CX-8 Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs 7th August, 2002 Subject : Cash recovery of money credit scheme - Applicability of Section 11D of ??? the Central Excise Act, 1944 - Regarding. I am directed to invite reference to Board's Circular 216/50/96-CX, dated 4-6-1996 regarding applicability of Section 11D of Central Excise Act, 1944 to the cases in which money credit has been availed and utilised for the payment of duty on finished excisable products. It was directed not to take precipitative action to enforce demands as the matter was under examination by Board. 2. The matter has been examined. Board is of the view that Section 11D of Central Excise Act, 1944, requires a person liable to pay duty to deposit any amount collected in excess of the duty assessed or determined and paid on any excisable goods from the buyer of the goods in any manner as representing duty of excise. Therefore, in cases where duty collected has been deposited with the Government, Section 11D shall not apply. This position shall not undergo any change if the money credit available with the manufacturer is utilised to pay duty on any finished excisable product and this duty is collected from the buyer. Pending cases may be finalised accordingly. 3. Trade and field formation may be informed suitably. 4. Receipt of the same may be acknowledged. 5. Hindi version shall follow." 12. Learned counsel for the appellant has not disputed the issuance of the aforesaid Circular dated 7th August, 2002 by the Department. He has also not disputed that the Circular is applicable in the present case and it was not considered by the Assessing Officer as well as the appellate authority. 5. Hindi version shall follow." 12. Learned counsel for the appellant has not disputed the issuance of the aforesaid Circular dated 7th August, 2002 by the Department. He has also not disputed that the Circular is applicable in the present case and it was not considered by the Assessing Officer as well as the appellate authority. As per this circular, the provisions of Section 11D are not attracted, where amount of central excise duty has been deposited by way of debiting the same from Cenvat credit account. 13. We have also examined Section 11D of the Act and we find that recovery order issued by the Department on the basis of Section 11D of the Act was absolutely illegal and is liable to be quashed, the same has rightly been quashed by the learned Tribunal. 14. In view of above discussion, we find no merit in this appeal. The question framed in this appeal is decided in favour of the assessee and against the department. 15. The parties are directed to bear their own cost.Appeal dismissed. *******