Central Excise Act 1944

^1.[11A.Recovery of duties not levied or not paid or short levied or short paid or erroneously refunded. (Relevant Updates)

11A. (1) Where any duty of excise has not been levied or paid or has been short-levied or short paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any will ful misstatement or suppression of facts or contravention of any of the provisions of this Act or of the rules made there under with intent to evade payment of duty,—

(a) the Central Excise Officer shall, within ²¹[Two year] ^old [one year] from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so 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;

(b) the person chargeable with duty may, before service of notice under clause (a), pay on the basis of,—

(i) his own ascertainment of such duty; or

(ii) duty ascertained by the Central Excise Officer,

the amount of duty along with interest payable thereon under section 11AA

(2) The person who has paid the duty under clause (b) of sub-section (1), shall inform the Central Excise Officer of such payment in writing, who, on receipt of such information, shall not serve any notice under clause (a) of that sub-section in respect of the duty so paid or any penalty leviable under the provisions of this Act or the rules made thereunder

(3) Where the Central Excise Officer is of the opinion that the amount paid under clause (b) of sub-section (1) falls short of the amount actually payable, then, he shall proceed to issue the notice as provided for in clause (a) of that sub-section in respect of such amount which falls short of the amount actually payable in the manner specified under that sub-section and the period of ²¹[Two year] ^{old [}one year] shall be computed from the date of receipt of information under sub-section (2).

*(4) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by the reason of—

(a) fraud; or

(b) collusion; or

(c) any wilful mis-statement; or

(d) suppression of facts; or

(e) contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty

by any person chargeable with the duty, the Central Excise Officer shall, within five years from the relevant date, serve notice on such person requiring him to show cause why he should not pay the amount specified in the notice along with interest payable thereon under section 11AA and a penalty equivalent to the duty specified in the notice.

^Omitted[(5) Where, during the course of any audit, investigation or verification, it is found that any duty ^17New [has not been levied or paid or has been] ^old[has not been levied or paid] or short-levied or short-paid or erroneously refunded for the reason mentioned in clause (a) or clause (b) or clause (c) or clause (d) or clause (e) of sub-section (4) but the details relating to the transactions are available in the specified record, then in such cases, the Central Excise Officer shall within a period of five years from the relevant date, serve a notice on the person chargeable with the duty requiring him to show cause why he should not pay the amount specified in the notice along with interest under section 11AA and penalty equivalent to fifty per cent. of such duty.

(6) Any person chargeable with duty under sub-section (5), may, before service of show cause notice on him, pay the duty in full or in part, as may be accepted by him along with the interest payable thereon under section 11AA and penalty equal to one per cent. of such duty per month to be calculated from the month following the month in which such duty was payable, but not exceeding a maximum of twenty-five per cent. of the duty, and inform the Central Excise Officer of such payment in writing.

(7) The Central Excise Officer, on receipt of information under sub-section (6) shall—

(i) not serve any notice in respect of the amount so paid and all proceedings in respect of the said duty shall be deemed to be concluded where it is found by the Central Excise Officer that the amount of duty, interest and penalty as provided under sub-section (6) has been fully paid;

(ii) proceed for recovery of such amount if found to be short-paid in the manner specified under sub-section (1) and the period of ²¹[Two year] ^{old [}one year ]shall be computed from the date of receipt of such information.]

¹⁹[(7A) Notwithstanding anything contained in sub-section (1) or sub-section (3) or sub-section (4) ^Omitted [or sub-section (5)], the Central Excise Officer may, serve, subsequent to any notice or notices served under any of those sub-sections, as the case may be, a statement, containing the details of duty of central excise not levied or paid or short-levied or short-paid or erroneously refunded for the subsequent period, on the person chargeable to duty of central excise, then, service of such statement shall be deemed to be service of notice on such person under the aforesaid sub-section (1) or subsection (3) or sub-section (4) or sub-section (5), subject to the condition that the grounds relied upon for the subsequent period are the same as are mentioned in the earlier notice or notices.”.]

^{18 New} [(8) Where the service of notice is stayed by an order of a court or tribunal, the period of such stay shall be excluded in computing the period of ²¹[Two year] ^{old [}one year ]referred to in clause (a) of sub-section(1) or five years referred to in sub-section (4) ^Omitted [or sub-section (5)], as the case may be.]

^Old [(8) In computing the period of one year] referred to in clause (a) of sub-section (1) or five years referred to in sub-section (4) or sub-section (5), the period during which there was any stay by an order of the court or tribunal in respect of sssss payment of such duty shall be excluded.]

(9) Where any appellate authority or tribunal or court concludes that the notice issued under sub-section (4) is not sustainable for the reason that the charges of fraud or 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 there under with intent to evade payment of duty has not been established against the person to whom the notice was issued, the Central Excise Officer shall determine the duty of excise payable by such person for the period of ²¹[Two year] ^old [one year], deeming as if the notice were issued under clause (a) of sub-section (1).

(10) The Central Excise Officer shall, after allowing the concerned person an opportunity of being heard, and after considering the representation, if any, made by such person, determine the amount of duty of excise due from such person not being in excess of the amount specified in the notice. 

(11) The Central Excise Officer shall determine the amount of duty of excise under sub-section (10)—

(a) within six months from the date of notice where it is possible to do so in respect of cases falling under sub-section (1);

(b) within ²¹[Two year] ^{old [}one year] from the date of notice where it is possible to do so in respect of cases falling under sub-section (4) ^Omitted[or sub-section (5)]

(12) Where the appellate authority or tribunal or court modifies the amount of duty of excise determined by the Central Excise Officer under sub-section (10), then the amount of penalties and interest under this section shall stand modified accordingly, taking into account the amount of duty of excise so modified

(13) Where the amount as modified by the appellate authority or tribunal or court  is more than the amount determined under sub-section (10) by the Central Excise Officer, the time within which the interest or penalty is payable under this Act shall be counted from the date of the order of the appellate authority  or tribunal or court in respect of such increased amount.

(14) Where an order determining the duty of excise is passed by the Central Excise Officer under this section, the person liable to pay the said duty of excise shall pay the amount so determined along with the interest due on such amount whether or not the amount of interest is specified separately

(15) The provisions of sub-sections (1) to (14) shall apply mutatis mutandis to the recovery of interest where interest payable has not been paid or part paid erroneously refunded 

^Inserted[(16) The provisions of this section shall not apply to a case where the liability of duty not paid or short-paid is self-assessed and declared as duty payable by the assessee in the periodic returns filed by him, and in such case, recovery of non-payment or short-payment of duty shall be made in such manner as may be prescribed]

Explanation.— For the purposes of this section and section 11AC,—

(a) “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;

(b) “relevant date” means,—

(i) 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, and no periodical return as required by the provisions of this Act has been filed, the last date on which such return is required to be filed under this Act and the rules made there under;

(ii) 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 and the return has been filed ^Omitted[on due date], the date on which such return has been filed;

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

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

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

^Inserted[(vi) in the case where only interest is to be recovered, the date of payment of duty to which such interest relates]

^Omitted[(c) “specified records” means records including computerised records maintained by the person chargeable with the duty in accordance with any law for the time being in force.']]

²⁰[Explanation 2.—

For the removal of doubts, it is hereby declared that any non-levy, short-levy, non-payment, short-payment or erroneous refund where no show cause notice has been issued before the date on which the Finance Bill, 2015 receives the assent of the President, shall be governed by the provisions of section 11A as amended by the Finance Act, 2015.]

^Old[Explanation 2.—

For the removal of doubts, it is hereby declared that any non-levy, short-levy, non-payment, short-payment or erroneous refund before the date on which  the finance bill 2011 receives the assent of the president, shall continue to be governed by the provisions of section 11A as it stood immediately  before the date on which such assent is received ]

^{old 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 willful 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 substituted⁷.

⁸[Omitted

Omitted]

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 ⁹[one year] or five years, as the case may be.

¹⁴[(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 willful 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) The 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.

¹⁵[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.]

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 willful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made there under with intent to evade payment of duty.

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.

¹⁶[Explanation 3.— 

For the removal of doubts, it is hereby declared that no penalty under any of the provisions of this Act or the rules made thereunder shall be imposed in respect of payment of duty under this sub-section and interest thereon.]

(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 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.]

1. This section was inserted [w.e.f. 17-11-1980 vide Notification No. 182/80-C.E., dated 15-11-1980 by section 21 of the Customs, Central Excise and Salt and Central Boards of Revenue (Amendment) Act, 1978 (25 of 1978) and the action taken under this section have been declared valid by the following section 110 of the Finance Act, 2000 (10 of 2000).

2. Substituted (w.e.f. 17-11-1980) by s. 97 of the Finance Act, 2000 (10 of 2000).

3. Substituted (w.e.f. 12-5-2000) for the words “six months” by s. 97 of the Finance Act, 2000 (10 of 2000).

4. Substituted (w.e.f. 27-12-1985) by s. 3 of the Central Excise and salt (Amendment), Act, 1985 (79 of 1985).

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

6. Substituted (w.e.f. 12-5-2000) for the words “six months” by s. 97 of the Finance Act, 2000 (10 of 2000).

7. Consequent upon the amendment to the section 11A (w.e.f. 27-12-1985) by Central Excise and salt (Amendment) Act, 1985, all proceedings pending as on 27-12-1985, with the Assistant Collector of Central Excise under proviso to section 11A(1) of the Central Excise and Salt Act, 1944, stand transferred to the collector of Central Excise by virtue of the following section 8 of the Central Excise and Salt (Amendment) Act, 1985 (79 of 1985).

8. Omitted (w.e.f. 14-5-2003) by s. 139 of the Finance Act, 2003 (32 of 2003).

9. Substituted (w.e.f. 12-5-2000) for the words “six months” by s. 97 of the Finance Act, 2000 (10 of 2000).

10. Substituted (w.e.f. 14-5-1992) by s. 113 of the Finance Act, 1992 (18 of 1992).

11. Inserted (w.e.f. 11-5-2001) by s. 123 of the Finance Act, 2001 (14 of 2001).

12. Inserted (w.e.f. 14-5-2003) by s. 139 of the Finance Act, 2003 (32 of 2003).

13. Substituted (w.e.f. 26-5-1995) by s. 72 of the Finance Act, 1995 (22 of 1995).

14. Inserted vide The Taxation Laws (Amendment) Act, 2006

15. Added vide The Taxation Laws (Amendment) Act, 2006

16. Inserted vide Chapter IV of Finance Bill 2010

17. Substituted vide chapter IV of Finance Act 2012.

18. Substituted vide chapter IV of Finance Act 2012.

19. Inserted vide Chapter IV of Finance Bill 2013.

20 Substituted vide Chapter IV of Finance Act 2015

21 Substituted vide Chapter IV of Finance Act 2016

Prior 14.5.2003

1. Substituted vide Chapter IV of the Finance Act 2011-12 

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