I Preliminary 

 

1. Short title extent and commencement  

 

(1) This Act may be called the Central Excise Act 1944.

 

(2) It extends to the whole of India.

 

(3) It shall come into force on such date as the Central Government may by notification in the Official Gazette appoint in this behalf.

 

2. Definitions  

 

2. In this Act unless there is anything repugnant in the subject or context -

 

(a) "adjudicating authority" means any authority competent to pass any order or decision under this Act but does not include the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act 1963 (54 of 1963) Commissioner of Central Excise (Appeals) or Appellate Tribunal;

 

(aa) "Appellate Tribunal" means the Customs Excise and Gold (Control) Appellate Tribunal constituted under section 129 of the Customs Act 1962 (52 of 1962);

 

(aaa) "broker" or "commission agent" means a person who in the ordinary course of business makes contracts for the sale or purchase of excisable goods for others;

 

(b) "Central Excise Officer" means the Chief Commissioner of Central Excise Commissioner of Central Excise Commissioner of Central Excise (Appeals) Additional Commissioner of Central Excise Deputy Commissioner of Central Excise Assistant Commissioner of Central Excise or any other officer of the Central Excise Department or any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act 1963 (54 of 1963) with any of the powers of a Central Excise Officer under this Act;

 

(c) "curing" includes wilting drying fermenting and any process for rendering an unmanufactured product fit for marketing or manufacture;

 

(d) "excisable goods" means goods specified in the Schedule to the Central Excise Tariff Act 1985 as being subject to a duty of excise and includes salt;

 

(e) "factory" means any premises including the precincts thereof wherein or in any part of which excisable goods other than salt are manufactured or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on;

 

(ee) "Fund" means the Consumer Welfare Fund established under section 12C;

 

(f) "manufacture" includes any process -

 

(i) incidental or ancillary to the completion of a manufactured product; and

 

(ii) which is specified in relation to any goods in the section or Chapter notes of the schedule to the Central Excise Tariff Act 1985 as amounting to manufacture and the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods but also any person who engages in their production or manufacture on his own account;

 

(g) "prescribed" means prescribed by rules made under this Act;

 

(h) "sale" and "purchase" with their grammatical variations and cognate expressions mean any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration;

 

(i) [Omitted by Finance (No. 2) Act 1996]

 

(j) [Omitted by Finance (No. 2) Act 1996]

 

(jj) [Omitted by Act 25 of 1950]

 

(k) "wholesale dealer" means a person who buys or sells excisable goods wholesale for the purpose of trade or manufacture and includes a broker or commission agent who in addition to making contracts for the sale or purchase of excisable goods for others stocks such goods belonging to others as an agent for the purpose of sale.

 

II  Levy and Collection of  Duty  

 

3. Duties specified in the Schedule to the Central Excise Tariff Act 1985 to be levied  

 

3. (1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods which are produced or manufactured in India as and at the rates set forth in the Schedule to the Central Excise Tariff Act 1985.

 

Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured -

 

(1) in a free trade zone and brought to any other place in India; or

 

(ii) by a hundred per cent export-oriented undertaking and allowed to be sold in India shall be an amount equal to the aggregate of the duties of customs which would be leviable under section 12 of the Customs Act 1962 (52 of 1962) 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 and the Customs Tariff Act 1975 (51 of 1975).

 

Explanation 1 : Where in respect of any such like goods any duty of customs leviable under the said section 12 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 -

 

(i) "free trade zone" means the Kandla Free Trade Zone and the Santa Cruz Electronics Export Processing Zone and includes any other free trade zone which the Central Government may by notification in the Official Gazette specify in this behalf;

 

(ii) "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.

 

(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.

 

(2) 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 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.

 

(3) Different tariff values may be fixed -

 

(a) for different classes or descriptions of the same excisable goods; or

 

(b) for excisable goods of the same class or description -

 

(i) produced or manufactured by different classes of producers or manufacturers; or

 

(ii) 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.

 

3A. Emergency power of the Central Government to increase duties of excise [Repealed]  

 

4. Valuation of excisable goods for purposes of charging of duty of excise  

 

4. (1) Where under this Act the duty of excise is chargeable on any excisable goods with reference to value such value shall subject to the other provisions of this section be deemed to be -

 

(a) the normal price thereof that is to say the price at which such goods are ordinarily sold by assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal where the buyer is not a related person and the price is the sole consideration for the sale :

 

Provided that -

 

(i) where in accordance with the normal practice of the wholesale trade in such goods such goods are sold by the assessee at different prices to different classes of buyers (not being related persons) each such price shall subject to the existence of the circumstances specified in clause (a) be deemed to be the normal price of such goods in relation to each such class of buyers;

 

(ia) where the price at which such goods are ordinarily sold by the assessee is different for different places of removal each such price shall subject to the existence of other circumstances specified in clause (a) be deemed to be the normal price of such goods in relation to each such place of removal;

 

(ii) where such goods are sold by the assessee in the course of wholesale trade for delivery at the time and place of removal at a price fixed under any law for the time being in force or at a price being the maximum fixed under any such law then notwithstanding anything contained in clause (iii) of this proviso the price or the maximum price as the case may be so fixed shall in relation to the goods so sold be deemed to be the normal price thereof;

 

(ii) where the assessee so arranges that the goods are generally not sold by him in the course of wholesale trade except to or through a related person the normal price of goods sold by the assessee to or through such related person shall be deemed to be the price at which they are ordinarily sold by the related person in the course of wholesale trade at the time of removal to dealers (not being related persons) or where such goods are not sold to such dealers to dealers (being related persons) who sell such goods in retail;

 

(b) where the normal price of such goods in not ascertainable for the reason that such goods are not sold or for any other reason the nearest ascertainable equivalent thereof determined in such manner as may be prescribed.

 

(2) Where in relation to any excisable goods the price thereof for delivery at the place or removal is not known and the value thereof is determined with reference to the price for delivery at a place other than the place of removal the cost of transportation from the place of removal to the place of delivery shall be excluded from such price.

 

(3) 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.

 

(4) For the purposes of this section -

 

(a) "assessee" means the person who is liable to pay the duty of excise under this Act and includes his agent;

 

(b) "place of removal" means -

 

(i) a factory of any other place or premises of production or manufacture of the excisable goods;

 

(ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty

 

(iii) a depot premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory and from where such goods are removed;

 

(ba) "time of removal" in respect of goods removed from the place of removal referred to in sub-clause (iii) of clause (b) shall be deemed to be the time at which such goods are cleared from the factory.

 

(c) "related person" means a person who is so associated with the assessee that they have interest directly or indirectly in the business of each other and includes a holding company a subsidiary company a relative and a distributor of the assessee and any sub-distributor of such distributor.

 

Explanation : In this clause "holding company" subsidiary company and "relative" have the same meanings as in the Companies Act 1956;

 

(d) "value" in relation to any excisable goods -

 

(i) where the goods are delivered at the time of removal in a packed condition includes the cost of such packing except the cost of the packing which is of a durable nature and is returnable by the buyer to the assessee.

 

Explanation : In this sub-clause packing means the wrapper container bobbin pirn spool reel or warp beam or any other thing in which or on which the excisable goods are wrapped  contained or wound;

 

(ii) does not include the amount of the duty of excise sales tax and other taxes if any payable on such goods and subject to such rules as may be made the trade discount (such discount not being refundable on any account whatsoever) allowed in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale;

 

Explanation : For the purposes of this sub-clause the amount of the duty of excise payable on any excisable goods shall be the sum total of -

 

(a) the effective duty of excise payable on such goods under this Act; and

 

(b) the aggregate of the effective duties of excise payable under other Central Acts if any providing for the levy of duties of excise on such goods and the effective duty of excise on such goods under each Act referred to in clause (a) or under clause (b) shall be -

 

(i) in a case where a notification or order providing for any exemption (not being an exemption for giving credit with respect to or reduction of duty of excise under such Act on such goods equal to and duty of excise under such Act or the additional duty under section 3 of the Customs Tariff Act, 1975 (51 of 1975) already paid on the raw material or component parts used in the production or manufacture of such goods) from the duty of excise under such Act is for the time being in force the duty of excise computed with reference to the rate specified in such Act in respect of such goods as reduced so as to give full and complete effect to such exemption; and

 

(ii) in any other case the duty of excise computed with reference to the rate specified in such Act in respect of such goods.

 

(e) "wholesale trade" means sales to dealers industrial consumers Government local authorities and other buyers who or which purchase their requirements otherwise than in retail.

 

4A. Valuation of excisable goods goods with reference to retail sale price  

 

4A.  (1) 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 Measurers Act 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.

 

(2) 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.

 

(3) 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.

 

Explanation 1 : For the purpose 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.

 

Explanation 2 : Where on 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 price for the purposes of this section.

 

5. Remission of duty on goods found deficient in quantity  

 

5. (1) 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.

 

(2) 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 percentages 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  

 

5A. (1) 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 -

 

(1) in a free trade zone and brought to any other place in India; or

 

(ii) by a hundred per cent export-oriented undertaking and allowed to be sold in India.

 

Explanation : In this proviso free trade zone and "hundred per cent export-oriented undertaking" shall have the same meaning as in Explanation 2 to sub-section (1) of section 3.

 

(2) 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 the 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.

 

(3) 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.

 

(4) Every notification issued under sub-rule (1) and ever 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.

 

6. Registration of certain persons.  

 

6. Any prescribed person who is engaged in -

 

(a) the production or manufacture or any process of production or manufacture of any specified goods included in the Schedule to the Central Excise Tariff Act 1985 (5 of 1986) or

 

(b) 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 Schedule to the Central Excise Tariff Act  1985 (5 of 1986) shall get himself registered with the proper officer in such manner as may be prescribed.

 

7. [Omitted by Finance Act 1992 w.e.f. 14-5-1992]  

 

8. Restriction on possession of excisable goods  

 

8. 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.

 

9. Offences and penalties  

 

9. (1) 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) remove 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;

 

(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 -

 

(i) 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 with fine :

 

Provided that in the absence of a 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;

 

(ii) in any other case with imprisonment for a term which may extend to three years or with fine or with both.

 

(2) 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 find :

 

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.

 

(3) 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 :-

 

(i) the fact that the accused has been convicted for the first time for an offence under this Act;

 

(ii) 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;

 

(iii) 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;

 

(iv) the age the accused.

 

9A. Certain offences to be non-cognizable  

 

9A. 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.

 

9AA. Offences by companies  

 

9AA. (1) 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 the 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.

 

(2) 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 -

 

(a) "company" means any body corporate and includes a firm or other association of individuals; and

 

(b) "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  

 

9B. (1) 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 expenses of such person in such newspapers or in such manner as the court may direct.

 

(2) No publication under sub-section (1) shall 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.

 

(3) 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  

 

9C. (1) 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.

 

(2) 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  

 

9D. (1) A statement made and signed by a person before the 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 -

 

(a) 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

 

(b) 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.

 

(2) 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  

 

9E. (1) 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.

 

(2) The provisions of sub-section (1) shall have effect notwithstanding anything contained in sub-section (3) of section 9.

 

10. Power of courts to order forfeiture  

 

10. (1) 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.

 

11. Recovery of sums due to government  

 

11. In 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 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.

 

11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded  

 

11A. (1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded a Central Excise Officer may within six months 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 as if for the words "six months" 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 six months or five years as the case may be.

 

(2) 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.

 

(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 -

 

(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 producer or a licensee of a warehouse as the case may be the date on which 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.

 

11AA. Interest on delayed payment of duty  

 

11AA.  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 per cent per annum as is for the time being fixed by the Board 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 -

 

(a) for the amount of duty first determined to be payable the date on which the duty is so determined;

 

(b) for the amount of increased duty the date of order by which the increased amount of duty is first determined to be payable;

 

(c) for the amount of further increase of duty the date of order on which the duty is so further increased.

 

11AB. Interest to delayed payment of duty  

 

11AB. (1) 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 wilful mis-statement 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 the person liable to pay duty as determined under sub-section (2) of section 11A shall in addition to the duty be liable to pay interest as such rate not below ten per cent and not exceeding thirty per cent per annum as is for the time being fixed by the Board from the first day of the month succeeding the month in which the duty ought to have been paid under this Act or the rules made thereunder but for the provisions contained in sub-section (2) of section 11A till the date of payment of such duty.

 

(2) For the removal of doubts it is hereby declared that the provisions of sub-section (1) shall not apply to cases where the duty became payable before the date on which the Finance (No. 2) Bill 1996 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 etc. in certain cases  

 

11AC. 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 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 persons 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 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.

 

11B. Claim for refund of duty  

 

11B.  (1) 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 before the expiry of six months form 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 six months shall not apply where any duty has been paid under protest.

 

(2) If on receipt of any such application the Assistant 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 under the foregoing provisions of this sub-section shall instead of being credited to the Fund be paid to the applicant of such amount is relatable to -

 

(a) 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) unspent advance deposits lying in balance in the applicant's account current maintained with the Commissioner of Central Excise;

 

(c) 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;

 

(d) the duty of excise paid by the manufacturer if he had not passed on the incidence of such duty to any other person;

 

(e) the duty of excise borne by the buyer if he had not passed on the incidence of such duty to any other person;

 

(f) 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.

 

(3) 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).

 

(4) 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 thereunder.

 

(5) 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 -

 

(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 -

 

(a) 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 -

 

(i) 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

 

(ii) if the goods are exported by land the date on which such goods pass the frontier or

 

(iii) if the goods are exported by post the date of despatch of goods by the Post Office concerned to a place outside India;

 

(b) 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;

 

(c) 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 factory for export out of India the date of entry into the factory;

 

(d) 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;

 

(e) 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 form payment of duty by a special order issued under sub-section (2) of section 5A the date of issue of such order;

 

(f) in any other case the date of payment of duty.

 

11BB. Interest on delayed refunds  

 

11BB. 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 ten per cent and not exceeding thirty per cent per annum as is for the time being fixed by the Board 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 of the Commissioner (Appeals) Appellate Tribunal or any court against an order of the Assistant Commissioner 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  

 

11C. (1) Notwithstanding anything contained in this Act if the Central Government is satisfied -

 

(a) that a practice was or is generally prevalent regarding levy of duty of excise (including non-levy thereof) on any excisable goods; and

 

(b) that such goods were or are liable -

 

(i) to duty of excise in cases where according to the said practice the duty was not or is not being levied or

 

(ii) 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 on is being short-levied in accordance with the said practice.

 

(2) Where any notification under sub-section (1) in respect of any goods had 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 the 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 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  

 

11D. (1) 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 has collected any amount from the buyer of any goods in any manner as representing duty of excise shall forthwith pay the amount so collected to the credit of the Central Government.

 

(2) The amount paid to the credit of the Central Government under sub-section (1) shall be adjusted against the duty of excise payable by the person on finalisation of assessment and where any surplus is left after such adjustment 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 the relevant date for making an application under that section in such cases shall be the date of the public notice to be issued by the Assistant Commissioner of Central Excise.

 

12. Application of the provisions of Act VIII of 1878 to Central Excise Duties  

 

12. The Central Government may by notification in the Official Gazette declare that any to the provisions of the Customs Act 1962 (52 of 1962) relating to the levy of and exemption form customs duties drawback of duty warehousing offences and penalties confiscation and procedure relating of 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.

 

NEXT