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Demand of duty with respect to period of limitation

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As provided under s. 11a(1), a central excise officer can, within one year from relevant date, serve show cause notice on person chargeable to duty if- (a) duty of excise has not been levied or paid or (b) short levied or shortpaid or (c) erroneously refunded.

In cases of fraud, collusion, willful misstatement and suppression of facts or contravention  of any provision of of central excise act or rules with intent to evade payment of duty, the period of limitation is five years to issue SCN.

Now, the question arises that if audit takes place after the limitation period of one year from  relevant date, if cases of duties short levied or paid are detected during audit, where there is no malafide intention can there be SCN after the audit even though the limitation period is over?. I repeat that here we are talking about only those cases where there are genuine mistakes and misunderstanding and no malafide intention.

Pl. clarify the matter citing legal references.

Replies (2)
Originally posted by : Amit

As provided under s. 11a(1), a central excise officer can, within one year from relevant date, serve show cause notice on person chargeable to duty if- (a) duty of excise has not been levied or paid or (b) short levied or shortpaid or (c) erroneously refunded.

In cases of fraud, collusion, willful misstatement and suppression of facts or contravention  of any provision of of central excise act or rules with intent to evade payment of duty, the period of limitation is five years to issue SCN.

Now, the question arises that if audit takes place after the limitation period of one year from  relevant date, if cases of duties short levied or paid are detected during audit, where there is no malafide intention can there be SCN after the audit even though the limitation period is over?. I repeat that here we are talking about only those cases where there are genuine mistakes and misunderstanding and no malafide intention.

Pl. clarify the matter citing legal references.

during the audit if it is traced that duties are short levied and paid, then whether assessee recognized his fault and paid the shortage of duty with interest upfront at his own ?

if yes, then SCN is just a formality and assessee will not be convicted with evasion charges, and mere reply to SCN with clear intention that shortage of duty is paid upfront on advise of audit team and before issue of SCN.

if no , then what for the assessee was waiting for ? it counter supports the malafide intention of assessee to pay short of duty and department will establish that its practice of assesee to evade the taxes under shelter of misc notifications wrongly availed. 

Thanks you sharmasir.


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