Levy and Collection of Duty, Duties specified in the First Schedule, Valuation of Excisable Goods for purposes of charging of duty of excise.
3. Duties specified in the
First Schedule
3A. Omitted.
4. Valuation of Excisable goods for purposes of charging of duty of excise
4A. Valuation of excisable goods with reference to retail sale price.
5. Remission
of duty on goods found deficient in quantity.-
5A. Power to
grant exemption from duty of excise.-
6. Registration of certain
persons.
7. Omitted
8. Restriction on
possession of excisable goods.-
9. Offences and penalties.-
9A. Certain offences to
be non-cognizable.-
9AA. Offences by companies.-
9B. Powers of Court to publish name, place of business, etc., of persons
convicted under the Act.-
9C. Presumption of
culpable mental state.-
9D.
Relevancy of statements under certain circumstances.-
9E. Application of section 562 of the Code of Criminal Procedure, 1898 , and of
the Probation of Offenders Act, 1958.-
10. Power of Courts to order
forfeiture.-
11. Recovery of sums due to
Government.-
11A. Recovery of duties not levied or not paid or short-levied or short-paid or
erroneously refunded.-
11AA. Interest on
delayed payment of duty.-
11AB. Interest on delayed
payment of duty.-
11AC. Penalty for short-levy or non-levy of duty in certain cases.-
11B. Claim for refund of duty.-
11BB. Interest on delayed
refunds.-
11C. Power not to recover duty of excise not levied or short-levied as a result
of general practice.-
11D. Duties of excise collected from the buyer to be deposited with the Central
Government.-
11 DD
12. Application of the provisions of Act No.52 of 1962 to Central Excise
Duties.-
CHAPTER II
LEVY AND COLLECTION OF DUTY
- Duties specified in the First Schedule and the Second Schedule to
the Central Excise Tariff Act, 1985 to be levied.-
- There shall be levied and collected in such manner as may be
prescribed,—
- a duty of excise to be called the Central Value Added Tax
(CENVAT), on all excisable goods which are produced or manufactured
in India as, and at the rates, set forth in the First Schedule to
the Central Excise Tariff Act, 1985 (5 of 1986);
- a special duty of excise, in addition to the duty of excise
specified in clause (a) above, on excisable goods specified in the
Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986)
which are produced or manufactured in India, as, and at the rates,
set forth in the said Second Schedule:
Provided that the duties of excise which shall be levied and
collected on any excisable goods which are produced or
manufactured,—
- in a free trade zone or a special economic zone and brought
to any other place in India; or
- by a hundred per cent export-oriented undertaking and
brought to any other place in India,
shall be an amount equal to the aggregate of the duties of
customs which would be leviable under the Customs Act, 1962 (52
of 1962), or any other law for the time being in force on like
goods produced or manufactured outside India if imported into
India, and where the said duties of customs are chargeable by
reference to their value, the value of such excisable goods
shall, notwithstanding anything contained in any other provision
of this Act, be determined in accordance with the provisions of
the Customs Act, 1962(52 of 1962) and the Customs Tariff Act,
1975 (51 of 1975).
Explanation 1.—Where in respect of any such like goods, any duty
of customs leviable for the time being in force is leviable at
different rates, then, such duty shall, for the purposes of this
proviso, be deemed to be leviable under the said section 12 at
the highest of those rates.
Explanation 2.—In this proviso,—-
"free trade zone" means a zone which the Central Government
may, by notification in the Official Gazette, specify in this
behalf;
-
"hundred per cent export-oriented undertaking" means an
undertaking which has been approved as a hundred per cent
export-oriented undertaking by the Board appointed in this
behalf by the Central Government in exercise of the powers
conferred by section 14 of the Industries (Development and
Regulation) Act,1951 (65 of 1951), and the rules made under that
Act;
-
"special economic zone" means a zone which the Central
Government may, by notification in the Official Gazette, specify
in this behalf.
(1A) The provisions of sub-section (1) shall apply in respect of
all excisable goods other than salt which are produced or
manufactured in India by, or on behalf of Government, as they
apply in respect of goods which are not produced or manufactured
by Government.
- The Central Government may, by notification in the Official
Gazette, fix, for the purpose of levying the said duties, tariff
values of any articles enumerated, either specifically or under
general headings, in the First Schedule and the Second Schedule
to the Central Excise Tariff Act, 1985 (5 of 1986)] as
chargeable with duty ad valorem and may alter any tariff values
for the time being in force.
- Different tariff values may be fixed—
- for different classes or descriptions of the same excisable
goods; or
- for excisable goods of the same class or description—
- produced or manufactured by different classes of producers
or manufacturers; or
- sold to different classes of buyers:
Provided that in fixing different tariff values in respect of
excisable goods falling under sub-clause (i) or sub-clause (ii),
regard shall be had to the sale prices charged by the different
classes of producers or manufacturers or, as the case may be,
the normal practice of the wholesale trade in such goods.
Section 109 of Finance Act, 2000 (10 of 2000)
Section 133 of Finance Act, 2002 (20 of 2002)
3A. Omitted.
-
Valuation of Excisable goods for purposes of charging of duty
of excise.-
- Where under this Act, the duty of excise is chargeable on
any excisable goods with reference to their value, then, on each
removal of the goods, such value shall.
- in a case where the goods are sold by the assessee, for
delivery at the time and place of the removal, the assessee and
the buyer of the goods are not related and the price is the sold
consideration for the sale, be the transaction value;
- in any other case, including the case where the goods are not
sold, be the value determined in such manner as may be
prescribed.
- The provisions of this section shall not apply in respect of
any excisable goods for which a tariff value has been fixed
under sub-section (2) of Section 3.
- For the purpose of this Section, -
- "assessee" means the person who is liable to pay the duty of
excise under this Act and includes his agent;
- persons shall be deemed to be "related" if.
- they are inter-connected undertakings;
- they are relatives;
- amongst them the buyer is a relative and a distributor of
the assessee, or a sub-distributor of such distributor; or
- they are so associated that they have interest, directly or
indirectly, in the business of each other.
Explanation - in this clause.-
i. "inter-connected undertakings" shall have the meaning
assigned to it in Clause (g) of section 2 of the Monopolies and
Restrictive Trade Practices Act, 1969; and
-
"relative" shall have the meaning assigned to it in Clause
(41) of section 2 of the Companies Act, 1956;
- "place of removal" means-
- a factory or any other place or premises of production or
manufacture of the excisable goods;
- a warehouse or any other place or premises wherein the
excisable goods have been permitted to be deposited without
payment of duty,
- a depot, premises of a consignment agent or any other place
or premises from where excisable goods are to be sold after
their clearance form the factory.
cc. "time of removal", in respect of the excisable goods removed
from the place of removal referred to in sub-clause (iii) of
clause c shall be deemed to be the time at which such goods are
cleared from the factory.
from where such goods are removed;
- "transaction value" means the price actually paid or payable
for the goods, when sold, and includes in addition to the amount
charged as price, any amount that the buyer is liable to pay to,
or on behalf of, the assessee, by reason of, or in connection
with the sale, whether payable at the time of the sale or at any
other time, including, but not limited to, any amount charged
for, or to make provision for, advertising or publicity,
marketing and selling organization expenses, storage, outward
handling, servicing, warranty, commission or any other matter
but does not include the amount of duty of excise, sales tax and
other taxes, if any, actually paid or actually payable on such
goods;
For the removal of doubts, it is hereby declared that the
price-cum-duty of the excisable goods sold by the assessee shall
be the price actually paid to him for the goods sold and the
money value of the additional consideration, if any, flowing
directly or indirectly from the buyer to the assessee in
connection with the sale of such goods, and such price-cum-duty,
excluding sales tax and other taxes, if any, actually paid,
shall be deemed to include the duty payable on such goods.
Section 4 prior to 1.7.2000.
4A. Valuation of excisable goods with reference to retail sale
price.
- The Central Government may, by notification in the Official
Gazette, specify any goods, in relation to which it is required,
under the provisions of the Standards of Weights and Measures
Act, 1976 (60 of 1976) or the rules made thereunder or under any
other law for the time being in force, to declare on the package
thereof the retail sale price of such goods, to which the
provisions of sub-section (2) shall apply.
- Where the goods specified under sub-section (1) are
excisable goods and are chargeable to duty of excise with
reference to value, then, notwithstanding anything contained in
section 4, such value shall be deemed to be the retail sale
price declared on such goods less such amount of abatement, if
any, from such retail sale price as the Central Government may
allow by notification in the Official Gazette.
- The Central Government may, for the purpose of allowing any
abatement under sub-section (2), take into account the amount of
duty of excise, sales tax and other taxes, if any, payable on
such goods.
- where any goods specified under sub-section (1) are
excisable goods and the manufacturer-
- remove such goods form the place of manufacture without
declaring the retail sale price of such goods on the packages or
declares a retail sale price which is not the retail sale price
as required to be declared under the provisions of the Act,
Rules or other law as referred to in sub-section (1) ; or
- tampers with, obliterates or alters the retail sale price
declared on the packages of such goods after their removal from
place of manufacture,
then, such goods shall be liable to confiscation and the Central
Government shall ascertain in the prescribed manner the retail
sale price of such goods and the retail sale price so
ascertained shall be deemed to be the retail sale price for the
purposes of this section.
Explanation 1.—For the purposes of this section, "retail sale
price" means the maximum price at which the excisable goods in
packaged form may be sold to the ultimate consumer and includes
all taxes local or otherwise, freight, transport charges,
commission payable to dealers, and all charges towards
advertisement, delivery, packing, forwarding and the like, as
the case may be, and the price is the sole consideration for
such sale.
Provided that in case the provisions of the Act, Rules or other
law as referred to in sub-section (1) required to declare on the
package, the retail sale price excluding any taxes, local or
otherwise, the retail sale price shall be construde accordingly.
Explanation 2 : For the purposes of this section,-- Where on the packages of any excisable goods more than one
retail sale price is declared, the maximum of such retail sale
price shall be deemed to be the retail sale price;
- Where the retail price, declared on the package of any
excisable goods at the time of its clearance from the place of
manufacture, is altered to increase the retail sale price, such
altered retail sale price shall be deemed to be the retail sale
price.
- where different retail sale prices declared on different
packages for the sale of any excisable goods in packaged form in
different areas, each such retail price shall be the retail sale
price for the purposes of valuation of the excisable goods
intended to be sold in the area to which the retail sale price
relates.
-
Remission of duty on goods found deficient in quantity.-
- The Central Government may, by rules made under this section,
provide for remission of duty of excise leviable on any
excisable goods which due to any natural cause are found to be
deficient in quantity.
- Any rules made under sub-section (1) may, having regard to
the nature of the excisable goods or of processing or of curing
thereof, the period of their storage or transit and other
relevant considerations, fix the limit or limits of percentage
beyond which no such remission shall be allowed:
Provided that different limit or limits of percentage may be
fixed for different varieties of the same excisable goods or for
different areas or for different seasons.
5A. Power to grant exemption from duty of excise.-
- If the Central Government is satisfied that it is necessary
in the public interest so to do, it may, by notification in the
Official Gazette, exempt generally either absolutely or subject
to such conditions (to be fulfilled before or after removal) as
may be specified in the notification, excisable goods of any
specified description from the whole or any part of the duty of
excise leviable thereon:
Provided that, unless specifically provided in such
notification, no exemption therein shall apply to excisable
goods which are produced or manufactured—
- in a free trade zone or special economic zone and brought to
any other place in India; or
- by a hundred per cent export-oriented undertaking and
brought to any place in India.
Explanation.—In this proviso, "free trade zone", "special economic zone"
and "hundred per cent export-oriented undertaking" shall have the same
meanings as in Explanation 2 to sub-section (1) of section 3.
(1A) For removal of doubts, it is hereby declared that where an
exemption under sub-section (1) in respect of any excisable
goods from the whole of the duty of excise leviable thereon has
been granted absolutely, the manufacturer of such excisable
goods shall not pay the duty of excise on such goods.
- If the Central Government is satisfied that it is necessary
in the public interest so to do, it may, by special order in
each case, exempt from payment of duty of excise, under
circumstances of an exceptional nature to be stated in such
order, any excisable goods on which duty of excise is leviable.
(2A) The Central Government may, if it considers it necessary or
expedient so to do for the purpose of clarifying the scope or
applicability of any notification issued under sub-section (1)
or order issued under sub-section (2), insert an explanation in
such notification or order, as the case may be, by notification
in the Official Gazette at any time within one year of issue of
the notification under sub-section (1) or order under
sub-section (2), and every such explanation shall have effect as
if it had always been the part of the first such notification or
order, as the case may be.
- An exemption under sub-section (1) or sub-section (2) in
respect of any excisable goods from any part of the duty of
excise leviable thereon (the duty of excise leviable thereon
being hereinafter referred to as the statutory duty) may be
granted by providing for the levy of a duty on such goods at a
rate expressed in a form or method different from the form or
method in which the statutory duty is leviable and any exemption
granted in relation to any excisable goods in the manner
provided in this sub-section shall have effect subject to the
condition that the duty of excise chargeable on such goods shall
in no case exceed the statutory duty.
Explanation.—"Form or method", in relation to a rate of duty of
excise means the basis, namely, valuation, weight, number,
length, area, volume or other measure with reference to which
the duty is leviable.
- Every notification issued under sub-rule (1), and every
order made under sub-rule (2), of rule 8 of the Central Excise
Rules, 1944, and in force immediately before the commencement of
the Customs and Central Excises Laws (Amendment) Act, 1988 (29
of 1988) shall be deemed to have been issued or made under the
provisions of this section and shall continue to have the same
force and effect after such commencement until it is amended,
varied, rescinded or superseded under the provisions of this
section.
- Every notification issued under sub-section (1) or
sub-Section (2A) shall,—
- unless otherwise provided, come into force on the date of
its issue by the Central Government for publication in the
Official Gazette;
- also be published and offered for sale on the date of its
issue by the Directorate of Publicity and Public Relations,
Customs and Central Excise, New Delhi, under the Central Board
of Excise and Customs constituted under the Central Boards of
Revenue Act, 1963 (54 of 1963).
- Notwithstanding anything contained in sub-section (5), where
a notification comes into force on a date later than the date of
its issue, the same shall be published and offered for sale by
the said Directorate of Publicity and Public Relations on a date
on or before the date on which the said notification comes into
force.
Section 134 of the Finance Act, 2002
Section 142 of the Finance Act, 2002
- Registration of certain persons.
Any prescribed person who is engaged in—
- the production or manufacture or any process of production
or manufacture of any specified goods included in the First
Schedule and the Second Schedule to the Central Excise Tariff
Act, 1985 (5 of 1986), or
- the wholesale purchase or sale (whether on his own account
or as a broker or commission agent) or the storage of any
specified goods included in the First Schedule and the Second
Schedule to the Central Excise Tariff Act, 1985 (5 of
1986),shall get himself registered with the proper officer in
such manner asmay be prescribed.
- Omitted
- Restriction on possession of excisable goods.-
From such date as may be specified in this behalf by the Central
Government by notification in the Official Gazette, no person
shall, except as provided by rules made under this Act, have in
his possession any goods specified in the Second Schedule] in
excess of such quantity as may be prescribed for the purposes of
this section as the maximum amount of such goods or of any
variety of such goods which may be possessed at any one time by
such a person.
- Offences and penalties.-
- Whoever commits any of the following offences, namely:—
(a) contravenes any of the provisions of section 8 or of a rule
made under clause (iii) or clause (xxvii) of sub-section (2) of
section 37;
(b) evades the payment of any duty payable under this Act;
(bb) removes any excisable goods in contravention of any of the
provisions of this Act or any rule made thereunder or in any way
concerns himself with such removal;
(bbb) acquires possession of, or in any way concerns himself in
transporting, depositing, keeping, concealing, selling or
purchasing, or in any other manner deals with any excisable
goods which he knows or has reason to believe are liable to
confiscation under this Act or any rule made thereunder;
(bbbb) contravenes any of the provisions of this Act or the
rules made thereunder in relation to credit of any duty allowed
to be utilised towards payment of excise duty on final products;
(c) fails to supply any information which he is required by
rules made under this Act to supply, or (unless with a
reasonable belief, the burden of proving which shall be upon
him, that the information supplied by him is true) supplies
false information;
(d) attempts to commit, or abets the commission of, any of the
offences mentioned in clauses (a) and (b) of this section; shall
be punishable,—
- in the case of an offence relating to any excisable goods,
the duty leviable thereon under this Act exceeds one lakh of
rupees, with imprisonment for a term which may extend to seven
years and with fine:
Provided that in the absence of special and adequate reasons to
the contrary to be recorded in the judgment of the Court such
imprisonment shall not be for a term of less than six months;
- in any other case, with imprisonment for a term which may
extend to three years or with fine or with both.
- If any person convicted of an offence under this section is
again convicted of an offence under this section, then, he shall
be punishable for the second and for every subsequent offence
with imprisonment for a term which may extend to seven years and
with fine:
Provided that in the absence of special and adequate reasons to
the contrary to be recorded in the judgment of the Court such
imprisonment shall not be for a term of less than six months.
- For the purposes of sub-sections (1) and (2), the following
shall not be considered as special and adequate reasons for
awarding a sentence of imprisonment for a term of less than six
months, namely:—
- the fact that the accused has been convicted for the first
time for an offence under this Act;
- the fact that in any proceeding under this Act, other than
a prosecution, the accused has been ordered to pay a penalty or
the goods in relation to such proceedings have been ordered to
be confiscated or any other action has been taken against him
for the same act which constitutes the offence;
- the fact that the accused was not the principal offender
and was acting merely as a carrier of goods or otherwise was a
secondary party in the commission of the offence;
- the age of the accused.
9A. Certain offences to be non-cognizable.-
- Notwithstanding anything contained in the Code of Criminal
Procedure, 1898 (5 of 1898), offences under section 9 shall be
deemed to be non-cognizable within the meaning of that Code.
- Any offence under this chapter may, either before or after
institution of prosecution, be compounded by the Chief
Commissioner of Central Excise on payment, by the person accused
of the offence to the Central Government, of such compounding
amount as may be prescribed.
9AA. Offences by companies.-
- Where an offence under this Act has been committed by a
company, every person who, at the time the offence was committed
was in charge of, and was responsible to, the company for the
conduct of the business of the company, as well as the company,
shall be deemed to be guilty of the offence and shall be liable
to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render
any such person liable to any punishment provided in this Act,
if he
proves that the offence was committed without his knowledge or
that he had exercised all due diligence to prevent the
commission of such offence.
- Notwithstanding anything contained in sub-section (1), where
an offence under this Act has been committed by a company and it
is proved that the offence has been committed with the consent
or connivance of, or is attributable to any neglect on the part
of, any director, manager, secretary or other officer of the
company, such director, manager, secretary or other officer
shall also be deemed to be guilty of that offence and shall be
liable to be proceeded against and punished accordingly.
Explanation.—For the purposes of this section,—
- "company" means any body corporate and includes a firm or
other association of individuals; and
- "director" in relation to a firm means a partner in the
firm.
9B. Powers of Court to publish name, place of business, etc., of
persons convicted under the Act.-
- Where any person is convicted under this Act for
contravention of any of the provisions thereof, it shall be
competent for the Court convicting the person to cause the name
and place of business or residence of such person, nature of the
contravention, the fact that the person has been so convicted
and such other particulars as the Court may consider to be
appropriate in the circumstances of the case, to be published at
the expense of such person, in such newspapers or in such manner
as the Court may direct.
- No publication under sub-section (1) shall be made until the
period for preferring an appeal against the orders of the Court
has expired without any appeal having been preferred, or such an
appeal, having been preferred, has been disposed of.
- The expenses of any publication under sub-section (1) shall
be recoverable from the convicted person as if it were a fine
imposed by the Court.
9C. Presumption of culpable mental state.-
- In any prosecution for an offence under this Act which
requires a culpable mental state on the part of the accused, the
Court shall presume the existence of such mental state but it
shall be a defence for the accused to prove the fact that he had
no such mental state with respect to the act charged as an
offence in that prosecution.
Explanation.—In this section, "culpable mental state" includes
intention, motive, knowledge of a fact, and belief in, or reason
to believe, a fact.
- For the purposes of this section, a fact is said to be
proved only when the Court believes it to exist beyond
reasonable doubt and not merely when its existence is
established by a preponderance of probability.
9D. Relevancy of statements under certain circumstances.-
- A statement made and signed by a person before any Central
Excise Officer of a gazetted rank during the course of any
inquiry or proceeding under this Act shall be relevant, for the
purpose of proving, in any prosecution for an offence under this
Act, the truth of the facts which it contains,—
- when the person who made the statement is dead or cannot be
found, or is incapable of giving evidence, or is kept out of the
way by the adverse party, or whose presence cannot be obtained
without an amount of delay or expense which, under the
circumstances of the case, the Court considers unreasonable; or
- when the person who made the statement is examined as a
witness in the case before the Court and the Court is of opinion
that, having regard to the circumstances of the case, the
statement should be admitted in evidence in the interests of
justice.
- The provisions of sub-section (1) shall, so far as may be,
apply in relation to any proceeding under this Act, other than a
proceeding before a Court, as they apply in relation to a
proceeding before a Court.
9E. Application of section 562 of the Code of Criminal
Procedure, 1898 , and of the Probation of Offenders Act, 1958.-
- Nothing contained in section 562 of the Code of Criminal
Procedure, 1898 (5 of 1898) , or in the Probation of Offenders
Act, 1958 (20 of 1958), shall apply to a person convicted of an
offence under this Act unless that person is under eighteen
years of age.
- The provisions of sub-section (1) shall have effect
notwithstanding anything contained in sub-section (3) of section
9.
-
Power of Courts to order forfeiture.-
Any Court trying an offence under this Chapter may order the
forfeiture to Government of any goods in respect of which the
Court is satisfied that an offence under this Chapter has been
committed, and may also order the forfeiture of any receptacles,
packages or coverings in which such goods are contained and the
animals, vehicles, vessels or other conveyances used in carrying
the goods, and any implements or machinery used in the
manufacture of the goods.
-
Recovery of sums due to Government.-
IIn respect of duty and any other sums of any kind payable to the
Central Government under any of the provisions of this Act or of
the rules made thereunder including the amount required to be
paid to the credit of Central Government under Section 11D, the
officer empowered by the Central Board of Excise and Customs
constituted under the Central Boards of Revenue Act, 1963 (54 of
1963) to levy such duty or require the payment of such sums may
deduct the amount so payable from any money owing to the person
from whom such sums may be recoverable or due which may be in
his hands or under his disposal or control, or may recover the
amount by attachment and sale of excisable goods belonging to
such person; and if the amount payable is not so recovered, he
may prepare a certificate signed by him specifying the amount
due from the person liable to pay the same and send it to the
Collector of the district in which such person resides or
conducts his business and the said Collector, on receipt of such
certificate, shall proceed to recover from the said person the
amount specified therein as if it were an arrear of land
revenue.
Provided that where the person (hereinafter referred to as
predecessor) from whom the duty or any other sums of any kind,
as specified in this section, is recoverable or due, transfers
or otherwise disposes of his business or trade in whole or in
part or effects any change in the ownership thereof, in
consequence of which he succeeded in such business or trade by
any other person, all excisable goods, materials, preparations,
plants, machineries, vessels, utensils implements and articles
in the custody or possession of the person so succeeding may
also be attached and sold by such officer empowered by the
Central Board of Excise and Customs, after obtaining written
approval from the Commissioner of Central Excise for the
purposes of recovering such duty or other sums recoverable or
due from such predecessors at the time of such transfer or
otherwise disposal or change.
11A.
Recovery of duties not levied or not paid or short-levied
or short-paid or erroneously refunded.-
- 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
on or valuation of excisable goods under any other provisions of
this Act or the rules made thereunder, a Central Excise Officer
may, within 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, as
if, for the words "one year", the words "five years" were
substituted.
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 one year or five years, as the
case may be.
- The 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.
( 2A) Where any notice has been served on a person under
sub-section ( 1), the Central Excise Officer,—
- 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 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, where it is possible to do so, shall
determine the amount of such duty, within a period of one year;
and
- 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 of 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, 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 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.
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.
- For the purposes of this section,
- "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;
- "relevant date" means,—
- 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—
- 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;
- where no periodical return as aforesaid is filed, the last
date on which such return is to be filed under the said rules;
- in any other case, the date on which the duty is to be paid
under this Act or the rules made thereunder;
- 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;
- in the case of excisable goods on which duty of excise has
been erroneously refunded, the date of such refund
Section 110 of Finance Act, 2000 (10 of 2000)
11AA. Interest on delayed payment of duty.-
- Subject to the provisions contained in section 11AB, where a
person, chargeable with duty determined under sub-section (2) of
section 11A, fails to pay such duty within three months from the
date of such determination, he shall pay, in addition to the
duty, interest at such rate not below ten per cent and not
exceeding thirty six per cent per annum as is for the time being
fixed by the Central Government, by notification in the official
gazette, on such duty from the date immediately after the expiry
of the said period of three months till the date of payment of
such duty:
Provided that where a person chargeable with duty determined
under sub-section (2) of section 11A before the date on which
the Finance Bill, 1995 receives the assent of the President,
fails to pay such duty within three months from such date, then,
such person shall be liable to pay interest under this section
from the date immediately after three months from such date,
till the date of payment of such duty.
Explanation 1.—Where the duty determined to be payable is
reduced by the Commissioner (Appeals), Appellate Tribunal or, as
the case may be, the court, the date of such determination shall
be the date on which an amount of duty is first determined to be
payable.
Explanation 2.—Where the duty determined to be payable is
increased or further increased by the Commissioner (Appeals),
Appellate Tribunal or, as the case may be, the court, the date
of such determination shall be,—
- for the amount of duty first determined to be payable, the
date on which the duty is so determined;
- for the amount of increased duty, the date of order by which
the increased amount of duty is first determined to be payable;
- for the amount of further increase of duty, the date of
order on which the duty is so further increased.
- The provisions of sub-section (1) shall not apply to cases
where the duty becomes payable on and after the date on which
the Finance Bill, 2001 receives the assent of the President.
11AB. Interest on delayed payment of duty.-
- Where any duty of excise has not been levied or paid or has
been short-levied or short-paid or erroneously refunded, the
person who is liable to pay the duty as determined under
sub-section ( 2), or has paid the duty under sub-section ( 2B),
of section 11A, shall, in addition to the duty, be liable to pay
interest at such rate not below ten per cent. and not exceeding
thirty-six per cent. per annum, as is for the time being fixed
by the Central Government, by notification in the Official
Gazette, from the first date of the month succeeding the month
in which the duty ought to have been paid under this Act, or
from the date of such erroneous refund, as the case may be, but
for the provisions contained in sub-section ( 2), or sub-section
( 2B), of section 11A till the date of payment of such duty:
Provided that in such cases where the duty becomes payable
consequent to issue of an order, instruction or direction by the
Board under section 37B, and such amount of duty payable is
voluntarily paid in full, without reserving any right to appeal
against such payment at any subsequent stage, within forty-five
days from the date of issue of such order, instruction or
direction, as the case may be, no interest shall be payable and
in other cases the interest shall be payable on the whole of the
amount, including the amount already paid.
- The provisions of sub-section ( 1) shall not apply to cases
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.
Explanation 1.—Where the duty determined to be payable is
reduced by the Commissioner (Appeals), the Appellate Tribunal
or, as the case may be, the court, the interest shall be payable
on such reduced amount of duty.
Explanation 2.—Where the duty determined to be payable is
increased or further increased by the Commissioner (Appeals),
the Appellate Tribunal or, as the case may be, the court, the
interest shall be payable on such increased or further increased
amount of duty.
11AC. Penalty for short-levy or non-levy of duty in certain
cases.-
Where any duty of excise has not been levied or paid or has been
short-levied or short-paid or erroneously refunded by reasons 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, the person who is liable to pay duty as determined under
sub-section (2) of section 11A, shall also be liable to pay a
penalty equal to the duty so determined:
Provided that where such duty as determined under sub-section
(2) of section 11A, and the interest payable thereon under
section 11AB, is paid within thirty days from the date of
communication of the order of the Central Excise Officer
determining such duty, the amount of penalty liable to be paid
by such person under this section shall be twenty-five per cent.
Of the duty so determined:br>
Provided further that the benefit of reduced penalty under the
first proviso shall be available if the amount of penalty so
determined has also been paid within the period of thirty days
referred to in that proviso:
Provided that also where the duty determined to be payable is
reduced or increased by the Commissioner (Appeals), the
Appellate Tribunal or, as the case may be, the court, then, for
the purposes of this section, the duty, as reduced or increased,
as the case may be, shall be taken into account:
Provided also that in case where the duty determined to be
payable is increased by the Commissioner (Appeals), the
Appellate Tribunal or, as the case may be, the court, then, the
benefit of reduced penalty under the first proviso shall be
available, if the amount of duty so increased, the interest
payable thereon and twenty-five per cent. of the consequential
increase of the penalty have also been paid within thirty days
of the communication of the order by which such increase in the
duty takes effect.
Explanation : For the removal of doubts, it is hereby declared
that --
- the provisions of this section shall also apply to cases in
which the order determining the duty under sub-section (2) of
section 11A relates to notices issued prior to the date on which
the Finance Act, 2000 receives the assent of the President;
- any amount paid to the credit of the Central Government prior
to the date of communication of the order referred to in the
first proviso or the fourth proviso shall be adjusted against
the total amount due from such person.
11B. Claim for refund of duty.-
- Any person claiming refund of any duty of excise may make an
application for refund of such duty to the Assistant
Commissioner of Central Excise or Deputy Commissioner of Central
Excise before the expiry of one year from the relevant date in
such form and manner as may be prescribed and the application
shall be accompanied by such documentary or other evidence
(including the documents referred to in section 12A) as the
applicant may furnish to establish that the amount of duty of
excise in relation to which such refund is claimed was collected
from, or paid by, him and the incidence of such duty had not
been passed on by him to any other person:
Provided that where an application for refund has been made
before the commencement of the Central Excises and Customs Laws
(Amendment) Act, 1991, such application shall be deemed to have
been made under this sub-section as amended by the said Act and
the same shall be dealt with in accordance with the provisions
of sub-section (2) substituted by that Act;
Provided further that the limitation of one year shall not apply
where any duty has been paid under protest.
- If, on receipt of any such application, the Assistant
Commissioner of Central Excise or Deputy Commissioner of Central
Excise is satisfied that the whole or any part of the duty of
excise paid by the applicant is refundable, he may make an order
accordingly and the amount so determined shall be credited to
the Fund:
Provided that the amount of duty of excise as determined by the
Assistant Commissioner of Central Excise or Deputy Commissioner
of Central Excise under the foregoing provisions of this
sub-section shall, instead of being credited to the Fund, be
paid to the applicant, if such amount is relatable to—
- 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;
- unspent advance deposits lying in balance in the applicant's
account current maintained with the Commissioner of Central
Excise;
- refund of credit of duty paid on excisable goods used as
inputs in accordance with the rules made, or any notification
issued, under this Act;
- the duty of excise paid by the manufacturer, if he had not
passed on the incidence of such duty to any other person;
- the duty of excise borne by the buyer, if he had not passed
on the incidence of such duty to any other person;
- the duty of excise borne by any other such class of
applicants as the Central Government may, by notification in the
Official Gazette, specify:
Provided further that no notification under clause (f) of the
first proviso shall be issued unless in the opinion of the
Central Government the incidence of duty has not been passed on
by the persons concerned to any other person.
- Notwithstanding anything to the contrary contained in any
judgment, decree, order or direction of the Appellate Tribunal
or any Court or in any other provision of this Act or the rules
made thereunder or any other law for the time being in force, no
refund shall be made except as provided in sub-section (2).
- Every notification under clause (f) of the first proviso to
sub-section (2) shall be laid before each House of Parliament,
if it is sitting, as soon as may be after the issue of the
notification, and, if it is not sitting, within seven days of
its re-assembly, and the Central Government shall seek the
approval of Parliament to the notification by a resolution moved
within a period of fifteen days beginning with the day on which
the notification is so laid before the House of the People and
if Parliament makes any modification in the notification or
directs that the notification should cease to have effect, the
notification shall thereafter have effect only in such modified
form or be of no effect, as the case may be, but without
prejudice to the validity of anything previously done hereunder.
- For the removal of doubts, it is hereby declared that any
notification issued under clause (f) of the first proviso to
sub-section (2), including any such notification approved or
modified under sub-section (4), may be rescinded by the Central
Government at any time by notification in the Official Gazette.
Explanation.—For the purposes of this section,—
- "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;
- "relevant date" means,—
- in the case of goods exported out of India where a refund of
excise duty paid is available in respect of the goods themselves
or, as the case may be, the excisable materials used in the
manufacture of such goods,—
- if the goods are exported by sea or air, the date on which
the ship or the aircraft in which such goods are loaded, leaves
India, or
- if the goods are exported by land, the date on which such
goods pass the frontier, or
- if the goods are exported by post, the date of despatch of
goods by the Post Office concerned to a place outside India;
- in the case of goods returned for being remade, refined,
reconditioned, or subjected to any other similar process, in any
factory, the date of entry into the factory for the purposes
aforesaid;
- in the case of goods to which banderols are required to be
affixed if removed for home consumption but not so required when
exported outside India, if returned to a factory after having
been removed from such factoryfor export out of India, the date
of entry into the factory;
- in a case where a manufacturer is required to pay a sum, for
a certain period, on the basis of the rate fixed by the Central
Government by notification in the Official Gazette in full
discharge of his liability for the duty leviable on his
production of certain goods, if after the manufacturer has made
the payment on the basis of such rate for any period but before
the expiry of that period such rate is reduced, the date of such
reduction;
- in the case of a person, other than the manufacturer, the
date of purchase of the goods by such person;
(ea) in the case of goods which are exempt from payment of duty
by a special order issued under sub-section (2) of section 5A,
the date of issue of such order;
(eb) in case where duty of excise is paid provisionally under
this Act or the rules made thereunder, the date of adjustment of
duty after the final assessment thereof;
- in any other case, the date of payment of duty.
11BB. Interest on delayed refunds.-
If any duty ordered to be refunded under sub-section (2) of
section 11B to any applicant is not refunded within three months
from the date of receipt of application under sub-section (1) of
that section, there shall be paid to that applicant interest at
such rate, not below five per cent and not exceeding thirty per
cent per annum as is for the time being fixed by the Central
Government, by notification in the official gazette, on such
duty from the date immediately after the expiry of three months
from the date of receipt of such application till the date of
refund of such duty:
Provided that where any duty ordered to be refunded under
sub-section (2) of section 11B in respect of an application
under sub-section (1) of that section made before the date on
which the Finance Bill, 1995 receives the assent of the
President, is not refunded within three months from such date,
there shall be paid to the applicant interest under this section
from the date immediately after three months from such date,
till the date of refund of such duty.
Explanation. Where any order of refund is made by the
Commissioner (Appeals), Appellate Tribunal or any court against
an order of the Assistant Commissioner of Central Excise or
Deputy Cornmissioner of Central Excise, under sub-section (2) of
section 11B, the order passed by the Commissioner (Appeals),
Appellate Tribunal or, as the case may be, by the court shall be
deemed to be an order passed under the said sub-section (2) for
the purposes of this section.
11C. Power not to recover duty of excise not levied or
short-levied as a result of general practice.-
- Notwithstanding anything contained in this Act, if the
Central Government is satisfied—
- that a practice was, or is, generally prevalent regarding
levy of duty of excise (including non-levy thereof) on any
excisable goods; and
- that such goods were, or are, liable—
- to duty of excise, in cases where according to the said
practice the duty was not, or is not being, levied, or
- to a higher amount of duty of excise than what was, or is
being, levied, according to the said practice, then, the Central
Government may, by notification in the Official Gazette, direct
that the whole of the duty of excise payable on such goods, or
as the case may be, the duty of excise in excess of that payable
on such goods, but for the said practice, shall not be required
to be paid in respect of the goods on which the duty of excise
was not, or is not being, levied, or was, or is being,
short-levied, in accordance with the said practice.
- Where any notification under sub-section (1) in respect of
any goods has been issued, the whole of the duty of excise paid
on such goods or, as the case may be, the duty of excise paid in
excess of that payable on such goods, which would not have been
paid if the said notification had been in force, shall be dealt
with in accordance with the provisions of sub-section (2) of
section 11B:
Provided that the person claiming the refund of such duty or, as
the case may be, excess duty, makes an application in this
behalf to the Assistant Commissioner of Central Excise or Deputy
Commissioner of Central Excise, in the form referred to in
sub-section (1) of section 11B, before the expiry of six months
from the date of issue of the said notification.
11D. Duties of excise collected from the buyer to be deposited
with the Central Government.-
- Notwithstanding anything to the contrary contained in any
order or direction of the Appellate Tribunal or any Court or in
any other provision of this Act or the rules made thereunder,
every person who is liable to pay duty under this Act or the
rules made thereunder, and has collected any amount in excess of
duty assessed or determined and paid on any excisable goods
under this Act or the rules made thereunder from the buyer of
such goods in any manner as representing duty of excise, shall
forthwith pay the amount so collected to the credit of the
Central Government.
- Where any amount is required to be paid to the credit of the
Central Government under sub-section (1) 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.
- 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 amount so
determined.
- The amount paid to the credit of the Central Government
under sub-section (1) 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).
- Where any surplus is left after such 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 provisions 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 refund of such surplus
amount.
11 DD
- Where an amount has been collected in excess of the
duty assessed or determined or paid on any excisable goods under
this Act or the rules made thereunder from the buyer of such
goods, the person is liable to pay such amount as determined
under sub-section (3) of section 11D, shall, in addition to the
amount, be liable to pay interest at such rate not below 10%,
and not exceeding thirty six per cent per annum, as is for the
time being fixed by the Central Government by the notification
in the Official Gazette, from the 1st day of the month
succeeding the month in which the amount ought to have been paid
under this Act, but for the provisions contained in sub-section
(3) of section 11D, till the date of payment of such amount.
Provided that in such cases where the amount becomes payable
consequent to issue of an order, instruction or direction by the
Board under section 37B, and such amount payable each
voluntarily paid in full, without reserving any right to appeal
against such payment at any subsequent stage, within 45 days
from the date of issue of such order, instruction or direction,
as the case may be, no interest shall be payable in other cases
the interest shall be payable on the whole amount, including the
amount already paid.
- The provisions of sub-section (1) shall not apply to cases
where the amount had become payable or ought to have been paid
before the day on which the Finance Bill, 2003 receives the
Assent of the President.
Explanation1 : where the amount determined under sub-section (3)
of section 11D, is reduced by the Commissioner (Appeals), the
Appellate Tribunal or, as the case may be, the Court, the
interest payable thereon under sub-section (1) shall be on such
reduced amount.
Explanation 2 : where the amount determined under sub-section(3)
of Section 11D is increased by the Commissioner (Appeals), the
Appellate Tribunal or, as the case may be, the Court, the
interest payable thereon under sub-section (1) shall be on such
increased amount.
12. Application of the provisions of Act No.52 of 1962 to
Central Excise Duties.-
The Central Government may, by notification in the Official
Gazette, declare that any of the provisions of the Customs Act,
1962 (52 of 1962) relating to the levy of and exemption from
customs duties, drawback of duty, warehousing, offences and
penalties, confiscation, and procedure relating to offences and
appeals shall, with such modifications and alterations as it may
consider necessary or desirable to adapt them to the
circumstances, be applicable in regard to like matters in
respect of the duties imposed by section 3.