Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded
Section 11A of the Central Excise Act, 1944 deals with recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. levied or short-paid or erroneously refunded.-- (1) Where any duty of excise has not been levied or paid or has been short-levied or shortpaid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful misstatement or suppression of facts or contravention of a The Act came into force on 28 Feb 1944.
1[11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded.-- (1) Where any duty of excise has not been levied or paid or has been short-levied or shortpaid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful misstatement 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,--
(a) the Central Excise Officer shall, within 2[two years] from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice;
(b) the person chargeable with duty may, before service of notice under clause (a), pay on the basis of,--
(i) his own ascertainment of such duty; or
(ii) the duty ascertained by the Central Excise Officer,
the amount of duty along with interest payable thereon under Section 11-AA.
(2) The person who has paid the duty under clause (b) of sub-section (1), shall inform the Central Excise Officer of such payment in writing, who, on receipt of such information, shall not serve any notice under clause (a) of that sub-section in respect of the duty so paid or any penalty leviable under the provisions of this Act or the rules made thereunder.
(3) Where the Central Excise Officer is of the opinion that the amount paid under clause (b) of sub-section (1) falls short of the amount actually payable, then, he shall proceed to issue the notice as provided for in clause (a) of that sub-section in respect of such amount which falls short of the amount actually payable in the manner specified under that sub-section and the period of 2[two years] shall be
computed from the date of receipt of information under sub-section (2).
(4) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by the reason of--
(a) fraud; or
(b) collusion; or
(c) any wilful misstatement; or
(d) suppression of facts; or
(e) contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,
by any person chargeable with the duty, the Central Excise Officer shall, within five years from the relevant date, serve notice on such person requiring him to show cause why he should not pay the amount specified in the notice along with interest payable thereon under Section 11-AA and a penalty equivalent to the duty specified in the notice.
(5) 3[* * *]
(6) 4[* * *]
(7) 5[* * *]
6[(7A) Notwithstanding anything contained in sub-section (1) or sub-section (3) or sub-section (4) 7[* * *], the Central Excise Officer may, serve, subsequent to any notice or notices served under any of those sub-sections, as the case may be, a statement, containing the details of duty of central excise not levied or paid or short-levied or short-paid or erroneously refunded for the subsequent period, on the person chargeable to duty of central excise, then, service of such statement shall be deemed to be service of notice on such person under the aforesaid sub-section (1) or sub-section (3) or sub-section (4) 7[* * *], subject to the condition that the grounds relied upon for the subsequent period are the same as are mentioned in the earlier notice or notices.]
8[(8) Where the service of notice is stayed by an order of a court or tribunal, the period of such stay shall be excluded in computing the period of 11[two years] referred to in clause (a) of sub-section (1) or five years referred to in sub-section (4) 7[* * *], as the case may be.]
(9) Where any appellate authority or tribunal or court concludes that the notice issued under sub-section (4) is not sustainable for the reason that the charges of fraud or collusion or any wilful misstatement 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 has not been established against the person to whom the notice was issued, the Central Excise Officer shall determine the duty of excise payable by such person for the period of 2[two years], deeming as if the notice were issued under clause (a) of sub-section (1).
(10) The Central Excise Officer shall, after allowing the concerned person an opportunity of being heard, and after considering the representation, if any, made by such person, determine the amount of duty of excise due from such person not being in excess of the amount specified in the notice.
(11) The Central Excise Officer shall determine the amount of duty of excise under sub-section (10)--
(a) within six months from the date of notice where it is possible to do so, in respect of cases falling under sub-section (1);
(b) within 2[two years from the date of notice, where it is possible to do so, in respect of cases falling under sub-section (4) 5[* * *].
(12) Where the appellate authority or tribunal or court modifies the amount of duty of excise determined by the Central Excise Officer under sub-section (10), then the amount of penalties and interest under this section shall stand modified accordingly, taking into account the amount of duty of excise so modified.
(13) Where the amount as modified by the appellate authority or tribunal or court is more than the amount determined under sub-section (10) by the Central Excise Officer, the time within which the interest or penalty is payable under this Act shall be counted from the date of the order of the appellate authority or tribunal or court in respect of such increased amount.
(14) Where an order determining the duty of excise is passed by the Central Excise Officer under this section, the person liable to pay the said duty of excise shall pay the amount so determined along with the interest due on such amount whether or not the amount of interest is specified separately.
(15) The provisions of sub-sections (1) to (14) shall apply, mutatis mutandis, to the recovery of interest where interest payable has not been paid or part paid or erroneously refunded.
Explanation 1. For the purposes of this section and Section 11-AC,--
(a) dbqysrefund" includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India;
(b) "relevant date" means,--
(i) in the case of excisable goods on which duty of excise has not been levied or paid or has been short-levied or short-paid, and no periodical return as required by the provisions of this Act has been filed, the last date on which such return is required to be filed under this Act and the rules made thereunder;
(ii) in the case of excisable goods on which duty of excise has not been levied or paid or has been short-levied or short-paid and the return has been filed 9[* * *], the date on which such return has been filed;
(iii) in any other case, the date on which duty of excise is required to be paid under this Act or the rules made thereunder;
(iv) in a case where duty of excise is provisionally assessed under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof;
(v) in the case of excisable goods on which duty of excise has been erroneously refunded, the date of such refund;
10[(vi) in the case where only interest is to be recovered, the date of payment of duty to which such interest relates.]
(c) 11[* * *]
12[Explanation 2.-- For the removal of doubts, it is hereby declared that any non-levy, short-levy, non-payment, short-payment or erroneous refund where no show cause notice has been issued before the date on which the Finance Bill, 2015 receives the assent of the President, shall be governed by the provisions of Section 11A as amended by the Finance Act, 2015.]
13[(16) The provisions of this section shall not apply to a case where the liability of duty not paid or short-paid is self-assessed and declared as duty payable by the assessee in the periodic returns filed by him, and in such case, recovery of non-payment or short-payment of duty shall be made in such manner as may be prescribed.]]
Section 11A, The Central Excise Act, 1944 (Act 1 of 1944).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Referred to by 7
- s. 11AA Interest on delayed payment of duty
- s. 11AC Penalty for short-levy or non-levy of duty in certain cases
- s. 11DDA Provisional attachment to protect revenue in certain cases
- s. 32L Power of Settlement Commission to send a case back to the Central Excise Officer
- s. 35A Procedure in appeal
- s. 35EE Revision by Central Government
- Finance Act s. 91 Amendment of section 11A
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Commr. of Cen. Excise vs International Auto LTD
Court's Decision & Legal Precedent
Under the amended scheme of Sections 11A, 11AB of the Central Excise Act, 1944 as amended by Act 14 of 2001 and Act 32 of 2003, interest under Section 11AB is leviable on differential excise duty arising from retrospective price revisions in supply contracts, regardless of whether such understatement of value and short-levy of duty at the time of removal was unintentional or committed without fraudulent means. The leviability of interest is premised on the principle that interest compensates the government for loss of revenue on delayed payment of duty. When goods are cleared at prices later revised upward retrospectively, the goods carried a higher value at the time of clearance and were cleared on short-payment of duty, and such short-payment must be treated as having occurred at the time of removal, not at the time supplementary invoices are issued.
On this section: Recovery of duty not levied, short-levied, short-paid, or erroneously refunded; provisions regarding modes of payment and conditions; amended by Act 25 of 1978, Act 14 of 2001, and Act 32 of 2003
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Jayaswal Neco LTD vs Commnr. of Central Excise, Raipur
Court's Decision & Legal Precedent
When the facility for fortnightly installment payment of excise duty is suspended under Rule 173G(1)(e) of the Central Excise Rules, 1944, the suspension restricts only the manner of payment (from fortnightly to daily basis) and not the mode of payment. Consequently, excise duty can be validly discharged during such suspension period through either account current (cash) debit or through utilization of Cenvat Credit, as both modes are explicitly recognized in Rule 173G(1)(b). Payment through Cenvat Credit constitutes valid and complete discharge of duty liability and does not amount to non-payment attracting interest liability, as Cenvat Credit under the Modvat scheme is 'as good as tax paid' and operates as an independent scheme with its own framework. The language in Rule 173G(1)(e) mandating payment "by debit to the account current" does not create an exclusive or prohibitive mandate excluding Cenvat Credit, particularly in the absence of specific prohibition, and must be read consistently with the recognition of Cenvat Credit as a valid mode in Rule 173G(1)(b). Therefore, interest under Rule 173G(1)(d) or Section 11AA is not chargeable for payment made through Cenvat Credit during a suspension period.
On this section: Section 11A permits recovery of duty not levied, not paid, short levied, short paid, or erroneously refunded within one year from the relevant date by serving a show cause notice
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Commnr. of Central Excise, Chandigarh vs Shital International
Court's Decision & Legal Precedent
A process amounts to manufacture of processed fabric under Central Excise Tariff Act Chapter Note 4 to Chapter 60 only if the process results in a permanent or lasting change in the character of the fabric such that the grey fabric ceases to be grey fabric as commercially known and understood. Applying the ejusdem generis rule, processes not listed but claimed to fall within 'any other process' must have the same character as listed processes (bleaching, dyeing, printing etc.) which all produce permanent changes. The processes of shearing and back-coating, which do not produce permanent or lasting change in the fabric character, do not amount to manufacture and therefore goods classified under these processes remain unprocessed and eligible for exemption under notification No. 06/2000-CE prescribing nil rate of duty on unprocessed knitted fabrics.
On this section: Provisions regarding recovery of duty and interest on goods found to be wrongly classified or exempted
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Commissioner of Central Excisae Vapi vs Kraftech Products INC
Court's Decision & Legal Precedent
Rule 34(b) of the Standards of Weights and Measures (Packaged Commodity) Rules, 1977 applies to multi-piece packages containing commodities, and if the commodities are sold by weight or measure and the combined net weight of all pieces in the multi-piece package is 10 grams or less, the manufacturer is exempt from the requirement to declare Retail Maximum Price and is not subject to Section 4A of the Central Excise Act, 1944; instead, valuation under Section 4 applies. The combined weight should be considered for determining applicability of the Rule 34(b) exemption because Rule 2(j)'s illustration explicitly directs consideration of combined net weight for determining the applicability of the rules.
On this section: Allows demand and recovery of differential excise duty; basis for show-cause notices issued to manufacturers questioning differential duty assessment
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Comnr. of Central Excise, Chennai vs T. V. S. Suzuki Ltd. , Hosur
Court's Decision & Legal Precedent
Refund claims made pursuant to finalization of provisional assessments under Rule 9B sub-rule (5) prior to 25 June 1999 are governed by the principle established in Mafatlal Industries Ltd., which excludes the application of time-bar restrictions in Sections 11A and 11B of the Central Excise Act, 1944. The subsequent amendment to sub-rule (5) by Notification No. 45/99-CE dated 25.6.1999, which introduced a proviso making such refunds subject to Section 11B procedures, is not retrospectively applicable to claims filed before the amendment came into force. Administrative delay in processing a pending refund claim does not defeat the substantive rights of an assessee accrued at the time of filing the claim.
On this section: Time-bar restrictions on refund claims - Court held that for claims arising from provisional assessment finalization prior to 1999, Section 11A restrictions do not apply
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Escorts Jcb LTD vs Comnr. of Central Excise, Delhi-ii
Court's Decision & Legal Precedent
The arrangement of transit insurance by a manufacturer on behalf of a buyer does not, by itself, indicate that the manufacturer has retained ownership of the goods or that the sale is incomplete. The transfer of ownership and the arrangement of insurance are separate matters that need not necessarily coincide. Where goods are sold on ex-works terms with separate charging of freight and insurance, and delivery is made to a carrier at the factory gate, the place of removal for excise duty purposes is the factory gate, not the buyer's location. Insurance can be arranged by one party on behalf of another without the arranging party retaining ownership, as established by principles of insurance law.
On this section: Extended period for demanding central excise duty; the Commissioner invoked this section to extend the demand period to 5 years
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Commnr. of Central Excise, Meerut vs Bharat Petroleum Corpn. LTD
Court's Decision & Legal Precedent
An appeal under Section 35-L(b) of the Central Excise Act, 1944, is maintainable only when it involves determination of any question having relation to the rate of duty of Excise or to the value of goods for the purpose of assessment. A question concerning whether a dealer (as opposed to a manufacturer) is liable to pay excise duty does not relate to the rate of duty or value of goods and therefore falls outside the appellate jurisdiction conferred by Section 35-L(b). Consequently, an appeal raising only such a question is not maintainable, and the appellate court may dismiss it on jurisdictional grounds without engaging the substantive merits. Additionally, new grounds of challenge not raised before the lower appellate authority cannot be introduced for the first time before the Supreme Court.
On this section: Basis for the original demand along with Section 11-D; dealt with as part of the aggregated demand challenged by assessee
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Aeon's Construction Products LTD vs Commnr. of Central Excise, Chennai
Court's Decision & Legal Precedent
After the amendment to Section 11-A of the Central Excise Act, 1944 effective from 14.5.1992, any Central Excise Officer including a Superintendent has statutory jurisdiction to issue show-cause notices in cases involving allegations of fraud, collusion, willful misstatement or suppression of fact. Board Circulars prescribing which officer should issue such notices are administrative directions for allocation of work and do not restrict the jurisdiction conferred by the Act. Non-compliance with such Circulars does not invalidate the show-cause notice or the adjudication order, and the Board has no power to curtail the jurisdiction vested in Central Excise Officers by the Act. Further, in the absence of evidence that paving blocks are used in pre-fabricated buildings, they cannot qualify for Tariff Head 6807.20 and must be classified under Tariff Head 6807.90 attracting duty.
On this section: Amended effective 14.5.1992 to vest power of issuing show-cause notices in any Central Excise Officer (not just Collector); Court interpreted this as granting jurisdiction to Superintendent level officers
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… Suppression is found in both statutes as a ground to extend the period. In the aforesaid judgment of this Court has held that the period begins with knowledge by the department. 102. While on suppression, I may notice the judgment of this Court again rendered under Section 11A of Central Excise Act and reported in Bajaj Auto Ltd., Waluj, Aurangabad (supra). In the said case, I need to notice the following paragraphs: > "15. Section 11-A of the Act empowers the Central Excise Officer to initiate proceedings where duty has not been levied or short-levied within six months from …
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… Suppression is found in both statutes as a ground to extend the period. In the aforesaid judgment of this Court has held that the period begins with knowledge by the department. 102. While on suppression, I may notice the judgment of this Court again rendered under Section 11A of Central Excise Act and reported in Bajaj Auto Ltd., Waluj, Aurangabad (supra). In the said case, I need to notice the following paragraphs: > "15. Section 11-A of the Act empowers the Central Excise Officer to initiate proceedings where duty has not been levied or short-levied within six months from …
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… thirteen crores twenty two lakhs thirty thousand three hundred sixty eight only) sanctioned during the period from June 2008 to July 2012 was erroneous as the duty on the exported goods were paid by utilizing the regularly availed credit which was not eligible to the assessee. Hence, the same was demanded under Section 11A(1)/Section 11A(4) of Central Excise Act. - 3. interest at the appropriate rate under Rule 14 of the Cenvat Credit Rules read with Section 11AA (erstwhile Section 11AB) of the Central Excise Act, was demanded on the irregular credit availed/erroneous rebate sanctioned. - 4. penalty of Rs. 23,02,53,752.00 (Rupees …
Made under this section, and citing it
28 instruments name this provision in its title or its text without being made under it.
- Circular No. 1063/2/2018-CXCircular 2018
- Notification No. 1/2018-Central Excise (N.T)Notification 2018
- CENTRAL EXCISE RULES, 2017Rule 2017
- CENVAT CREDIT RULES, 2017Rule 2017
- Circular No. 1053/02/2017-CXCircular 2017
- No. 19/2017 - Central Excise (N.T.)Notification 2017
- No. 20/2017 - Central Excise (N.T.)Notification 2017
- Circular No. 1049/37/2016-CXCircular 2016
- No. 20/2016 - Central Excise (N.T.)Notification 2016
- No. 8/2016- Central Excise (N.T)Notification 2016
- No. 6/2015-Central Excise (N.T.)Notification 2015
- No.9/2015 - Central Excise (N.T.)Notification 2015
- Notfn No 29/2012-CX (NT)Notification 2012
- circular no.962/5/2012 -CXCircular 2012
- Circular No. 957/18/2011-CXCircular 2011
- Circular No. 898/18/2009-CXCircular 2009
- Notification No.05/2002-CE (N.T)Notification 2002
- Notification No.31/2001-CE (N.T)Notification 2001
- Notification No.34/2001-CE (N.T)Notification 2001
- circular no. 588/25/2001-CXCircular 2001
- circular no. 601/38/2001-CXCircular 2001
- circular no. 606/43/2001-CXCircular 2001
- Circular no. 534/30/2000-CXCircular 2000
- Circular no. 537/33/2000-CXCircular 2000
- Circular no. 539/35/2000-CXCircular 2000
- Circular no. 555/51/2000-CXCircular 2000
- Notification No.11/2000-CE (N.T)Notification 2000
- Notification No.27/2000-CE (N.T)Notification 2000
Questions about Section 11A
What have the courts held on Section 11A of the Central Excise Act?
Commr. of Cen. Excise vs International Auto LTD (08 Jan 2010) is the leading judgment on this section among those set out below: Recovery of duty not levied, short-levied, short-paid, or erroneously refunded; provisions regarding modes of payment and conditions; amended by Act 25 of 1978, Act 14 of 2001, and Act 32 of 2003. Another 7 judgments on this section are set out below, all of them from the Supreme Court. They run from 2002 to 2015.
How do I find court cases under Section 11A of the Central Excise Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Central Excise Act 1944 11A, section 11A Central Excise Act 1944, section 11A of the Central Excise Act. People searching for it also type 11a central excise act and 11ac of central excise act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 8 reported judgments on this section are set out on this page, beginning with Commr. of Cen. Excise vs International Auto LTD (08 Jan 2010).
What should I read with Section 11A of the Central Excise Act, and has it changed?
Its own text turns on section 11 (Recovery of sums due to Government), so none of them can safely be read on its own. 7 other provisions in this corpus refer back to it. 28 instruments name it without being made under it, most recently Circular No. 1063/2/2018-CX (2018), then Notification No. 1/2018-Central Excise (N.T) (2018).
When did Section 11A of the Central Excise Act come into force?
Section 11A of the Central Excise Act, cited as Central Excise Act 1944 11A, came into force on 28 Feb 1944, having been enacted on 24 Feb 1944. It is in force as at the date shown on this page.
Other sections of this Act
- 4. Valuation of excisable goods for purposes of charging of duty of excise1751 words
- 11B. Claim for refund of duty and interest, if any, paid on such duty1342 words
- 35B. Appeals to the Appellate Tribunal1302 words
- 32F. Procedure on receipt of an application under Section 32-E1167 words
- 11AC. Penalty for short-levy or non-levy of duty in certain cases1093 words
- 35E. Powers of Committee of Principal Chief Commissioner of Central Excise or Chief Commissioners of Central Excise or Principal Commissioner of Central Excise or Commissioners of Central Excise to pass certain orders1020 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.