Get benefit of reduced penalty u/s 11AC of CEA, 1944 only if you pay duty, interest and penalty TOO within 30 days of communication of order - Amendment proposed
By TIOL News Service
NEW DELHI, MAR 16, 2012: CLAUSE 133 of the Finance Bill, 2012 seeks to amend section 11AC of the CEA, 1944 thus –
“In section 11AC of the Central Excise Act, in sub-section (1), -
(i) In clauses (a) and (b), for the words “has not been levied or paid or”, the words “has not been levied or paid or has been” shall respectively be substituted;
(ii) In clause (c), for the words “duty so determined”, the words “duty so determined only in a case where the penalty is paid within the period so specified” shall be substituted.”
The clauses (a), (b) and (c) of section 11AC of the CEA, 1944 (which incidentally has been inserted by the Finance Act, 2011) would read thus after enactment –
“11AC. Penalty for short-levy or non-levy of duty in certain cases.
(1) The amount of penalty for non-levy or short-levy or non-payment or short payment or erroneous refund shall be as follows:-
(a) 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 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 thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (10) of section 11A shall also be liable to pay a penalty equal to the duty so determined;
(b) where details of any transaction available in the specified records reveal that any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded as referred to in sub-section (5) of section 11 A, the person who is liable to pay duty as determined under sub-section (10) of section 11A shall also be liable to pay a penalty equal to fifty per cent, of the duty so determined;
(c) where any duty as determined under sub-section (10) of section 11A and the interest payable thereon under section 11 AA in respect of transactions referred to in clause (b) is paid within thirty days of the date of communication of order of the Central Excise Officer who has determined such duty, the amount of penalty liable to be paid by such person shall be twenty-five per cent, of the duty so determined only in a case where the penalty is paid within the period so specified ;”
It would be interesting to note that the earlier section 11AC of the CEA, 1944 carried a proviso clause (w.e.f 12.05.2000) to this effect. It read –
“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:”
The JS (TRU-I) letter dated 16 th March, 2012 makes the following mention about the proposed amendment in paragraph 15.5.
“15.5 Section 11AC provides for reduced penalty if the duty along with interest is paid within 30 days of the communication of the order. It is being amended to make available the benefit of reduced penalty only if the reduced penalty is also paid within the specified period of thirty days.”
Fair enough, one may say, but what about the past and what about the “has been” amendment proposed – silent implications!