Section 11A of the Central Excise Act, 1944 ('Act' for short) deals with the recovery of duties not levied or not paid or short paid or erroneously refunded. Section 11A of the Act provides that when any duty of excise has not been levied or paid or has been short levied or short paid or 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 or on valuation of excisable goods under any other provisions of this Act, or the rule made there under, a Central Excise Officer may, within one year from the relevant date, service 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 been erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice. 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 the Act or the rules made there under with intent to evade payment of duty by such person, or his agent, then the time limit for issue of show cause notice is five years from the relevant date. Thus in a case of non payment, short payment or erroneous refund of duty normally three issues are likely to arise relating to-
> Recovery under Section 11A;
> Interest under Section 11AA and Section 11AB; and
> Penalty under Section 11AC.
Section 11A (2B) provides for waiver of show cause notice if duty is paid with interest before issue of show cause notice. This article will discuss some issues in issuance of show cause notice.
Evidence for Show Cause Notice:
In 'Commissioner of Central Excise V. Castrol India Ltd' - 2009 (238) ELT 199 (Tri. Ahmd) the department contended that factually a show cause notice has been issued to the supplier and the amount of duty and penalty under the provisions of Sections 11A(1) and 11AC of the Act were invoked and duty and penalty have been confirmed in addition to the demand of interest under the provisions of Section 11AB. The appeal is against the order of the tribunal that there is nothing on record to indicate that the input supplier was issued a show cause invoking the first proviso to Section 11A for short payment made by him. The tribunal held that in the absence of any record before the Bench on that date, the conclusion reached by the Bench in that order is correct.
further info: http://www.cbec.gov.in/excise/cx-circulars/cx-circulars-03/752-03-cx.htm
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