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Section 11A – The Central Excise Act, 1944

The Central Excise Act, 1944

 

 

11A. RECOVERY OF DUTIES NOT LEVIED OR NOT PAID OR SHORT-LEVIED OR SHORT-PAID OR ERRONEOUSLY REFUNDED.

 

1[11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded.—(1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or 2[erroneously refunded, whether or not such non-levy or non-payment, short-levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder], a Central Excise Officer may, within 3[one year] from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice:

Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppres­sion of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, 4[as if 5[***]] for the words 6[“one year”], the words “five years” were substituted:

 

7[***]

 

Explanation.—Where the service of the notice is stayed by an order of a Court, the period of such stay shall be excluded in computing the aforesaid period of 7[one year] or five years, as the case may be.

 

8[(1A) When any duty of excise has not been levied or paid or has been short-levied or short paid or erroneously refunded, by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, by such person or his agent, to whom a notice is served under the proviso to sub-section (1) by the Central Excise Officer, may pay duty in full or in part as may be accepted by him, and the interest payable thereon under section 11AB and penalty equal to twenty-five per cent. of the duty specified in the notice or the duty so accepted by such person within thirty days of the receipt of the notice.]

 

(2) 9[10[Central Excise Officer]] shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of duty of excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined:

 

8[Provided that if such person has paid the duty in full together with, interest and penalty under sub-section (1A), the proceedings in respect of such person and other persons to whom notice is served under sub-section (1) shall, without prejudice to the provisions of sections 9, 9A and 9AA, be deemed to be conclusive as to the matters stated therein:

 

Provided further that, if such person has paid duty in part, interest and penalty under sub-section (1A), the Central Excise Officer, shall determine the amount of duty or interest not being in excess of the amount partly due from such person.]

 

11[(2A) Where any notice has been served on a person under sub-section (1), the Central Excise Officer,—

 

(a) in case any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, where it is possible to do so, shall determine the amount of such duty, within a period of one year; and

 

(b) in any other case, where it is possible to do so, shall determine the amount of duty of excise which has not been levied or paid or has been short-levied or short-paid or erroneously refunded, within a period of six months,

 

from the date of service of the notice on the person under sub-section (1).

(2B) Where any duty or excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person, chargeable with the duty, may pay the amount of duty 12[on the basis of his own ascertainment of such duty or on the basis of duty ascertained by a Central Excise Officer] before service of notice on him under sub-section (1) in respect of the duty, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the duty so paid:

 

Provided that the Central Excise Officer may determine the amount of short payment of duty, if any, which in his opinion has not been paid by such person and then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of “one year” referred to in sub-section (1) shall be counted from the date of receipt of such information of payment.

 

Explanation 1.—Nothing contained in this sub-section shall apply in a case where the duty was not levied or was not paid or was short-levied or was short-paid or was erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty.

 

Explanation 2.—For the removal of doubts, it is hereby declared that the interest under section 11AB shall be payable on the amount paid by the person under this sub-section and also on the amount of short-payment of duty, if any, as may be determined by the Central Excise Officer, but for this sub-section.

 

(2C) The provisions of sub-section (2B) shall not apply to any case where the duty had become payable or ought to have been paid before the date on which the Finance Bill, 2001 receives the assent of the President.]

(3) For the purposes of this section—

 

(i) “refund” includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India;

 

(ii) “relevant date” means,—

 

13[(a) in the case of excisable goods on which duty of excise has not been levied or paid or has been short-levied or short-paid—

 

(A) where under the rules made under this Act a periodical re­turn, showing particulars of the duty paid on the excisable goods removed during the period to which the said return relates, is to be filed by a manufacturer or a producer or a licensee of a warehouse, as the case may be, the date on which such return is so filed;

 

(B) where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules;

 

(C) in any other case, the date on which the duty is to be paid under this Act or the rules made thereunder;]

 

(b) in a case where duty of excise is provisionally assessed under this Act or the rules made thereunder, the date of adjust­ment of duty after the final assessment thereof;

 

(c) in the case of excisable goods on which duty of excise has been erroneously refunded, the date of such refund.]

 

COMMENTS

Determination of amount

The officer on consideration of the representation, must determine the amount of duty due and thereupon the assessee is to pay the amount so determined; Lajya Dyeing & Bleaching Works. v. Union of India, (2003) 5 SCC 485.

 

Jurisdiction of Dy. Collector

 

Notice issued by Deputy Collector by invoking sec.11A for extended period, would be wholly without jurisdiction. Even for shorter period notice based on grounds contained in proviso could be issued only by Collector, Collector of Central Excise v. Oil and Natural Gas Commissions, AIR 1999 SC 2625.

 

Limitation

 

Mere failure or negligence on the part of the manufacturer in not taking out a licence and in not paying duty does not attract the extended period of limitation; Jaiprakash Industries Ltd. v. Commissioner of Central Excise, Chandigarh, AIR 2003 SC 349.

 

Show-cause notice

 

Where the show-cause notice under section 11A has been issued regarding the levy of duty within the extended period of limitation, no preliminary enquiry or preliminary decision is required unless there is serious dispute of facts in reply to show-cause notice; Union of India v. M/s. Maheshwari Woollen Mills, AIR 1993 SC 1251.

 

Where the purpose of show-cause notice is recovery of duties or charges short levied, etc., it must be issued within the prescribed period; Ballarpur Industries Ltd. v. Assistant Col­lector of Customs and Central Excises, AIR 1995 SC 1439.

 

Treatment of notice

 

Notice issued under proviso to sec. 11A for larger period. It cannot be treated as Notice under main sec.11A for shorter period of six months, Collector of Central Excise, Jaipur v. Alcobex Metals, AIR 2003 SCW 1925.

 

—————

1. Ins. by Act 25 of 1978, sec. 21 (w.e.f. 1-8-1978).

 

2. Subs. by Act 10 of 2000, sec. 97, for “erroneously refunded” (w.r.e.f. 17-11-1980).

 

3. Subs. by Act 10 of 2000, sec. 97, for “six-months” (w.e.f. 12-5-2000).

 

4. Subs. by Act 79 of 1985, sec. 3, for “as if” (w.e.f. 27-12-1985).

 

5. The words ‘for the words “Central Excise Officer”, the words “Collector of Central Excise”, and’ omitted by Act 18 of 1992, sec. 113 (w.e.f. 14-5-1992).

 

6. Ins. by Act 10 of 2000, sec. 97 (w.e.f. 12-5-2000).

 

7. Second and third provisos omitted by Act 32 of 2003, sec. 139 (w.e.f. 14-5-2003).

 

8. Ins. by Act 29 of 2006, sec. 35 (w.e.f. 13-7-2006).

 

9. Subs. by Act 79 of 1985, sec. 3, for “The Assistant Collector of Central Excise” (w.e.f. 27-12-1985).

 

10. Subs. by Act 18 of 1992, sec. 113, for “Assistant Collector of Central Excise or, as the case may be, the Collector of Central Excise” (w.e.f. 14-5-1992).

 

11. Ins. by Act 14 of 2001, sec. 123 (w.e.f. 11-5-2001).

 

12. Ins. by Act 32 of 2003, sec. 139 (w.e.f. 14-5-2003).

 

13. Subs. by Act 22 of 1995, sec. 72, for sub-clause (a) (w.e.f. 26-5-1995).

 

 

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