• Feb
  • 28
  • 2010

To avoid penalty for late payment, pay excise duty with interest

Article ID 22579 | Posted In Excise Duty | | 25 Comments » Print Friendly and PDF

WHEN section 11A(2B) of the Central Excise Act, 1944 made its appearance in the statute by the Finance Act, 2001 it came as a whiff of fresh air for assessees who had not paid, short paid, short levied/paid any duty of excise. The provision allowed a manufacturer to pay such un-paid Central Excise duty along with interest under section 11AB of the Central Excise Act, 1944 and inform the Central Excise officer who after being satisfied of this ascertainment lets go of the formality of issuance of the show cause notice in respect of the duty so paid .

Such occasions were born when either the officers from the Audit or the Preventive Wing visited the assessee and pointed out the deficiency or on some occasions, self-realization. The assessee being satisfied that there certainly was a lapse on his part volunteers to pay up this duty along with interest. The officers are also happy that they have effected “Spot Recovery” and would proudly show them in their resume.

However, there were instances when in such cases too where the assessee had made the payment of duty along with interest, the departmental authorities issued show cause notices seeking imposition of penalty under rule 25 of the CER, 2002. This, the officers attributed to the fact that there was nothing in the said sub-section 2B which prevented them from issuing SCN for imposition of penalty. But naturally, things take the usual course and the assessee feels cheated that inspite of he paying up the duty due along with interest, he is saddled with penalties.

Fortunately, section 11AC of Central Excise Act, 1944 was not being invoked as this section caters only to cases involving fraud, collusion, mis-statement, suppression etc. and which obviously are kept out of the purview of section 11A(2B) of the CEA, 1944.

The proposed Explanation 3 inserted by clause 63 of the Finance Bill, 2010 declares that no penalty under any of the provisions of this Act or the rules shall be imposed in cases covered by section 11A(2B) of the Central Excise Act 1944 . Obviously, being an Explanation and that too issued for removal of doubts, it certainly has a retrospective effect and the benefits would flow to all cases that are pending or which are in the pipeline. Hopefully, the departmental authorities accept this gracefully unlike the “cum-duty” explanation added by the Finance Act, 2003.

The new Explanation reads –

“Explanation 3 – For the removal of doubts, it is hereby declared that no penalty under any of the provisions of this Act or the rules made thereunder shall be imposed in respect of payment of duty under this sub-section and interest thereon.”


  • bathusha

    If any one answer my question.if actualy calculate excise duty 12% on march month but we calculate such duty on november month @ 12.5% then how to calculate duty & late of interest.thanks for advance

  • MADAN TAILOR

    I DEPOSIT INTEREST ON LATE PAYMENT OF BASIC EXCISE DUTY BUT I DO NOT KNOW I WHICH SECTION I DEPOSIT INTEREST ON LATE PAYMENT OF BASIC EXCISE DUTY
    DEAR SIR PLEASE US WHICH SECITION I DEPOSIT INTEREST SO I FILL ER-1

  • sathish

    Dear Sir
    I am in Working Private Limited Company Last Six Month Late Filling for Central excise Fine for Six Month 30000 How to solve this Problem

  • SATYA

    what rate penalty for 2 months late payment of central excise duty payable and for how many days

  • sunil deo

    Sir

    IF DUE TO SOME REASON NOT POSSIBLE TO PAY CENTRAL EXCISE BASIC DUTY ON 31.3.2015. AND IF WE PAID IT ON 4.4.2015. WHAT SHOULD BE INTEREST RATE AND DOES PENALTY IMPOSE TO US.

  • ak gupta

    Return file jan.15 short duty paid but balance in CENVAT we want to pay short duty from CENVAT with return Feb. 15. It is possible.

  • Rajkumar Singh

    sir,

    what is excise interest code ? please clear

  • Mani

    Central excise Duty date – Every Month 6

    But Paid on 07. 1day delay. How Much date in paid

  • Mani

    Central excise Duty date – Every Month 6

    But Paid on 07. 1day delay. How Much date in paid

    Thanking You

  • krishan

    please tell me excise duty deposit late
    panelty and interest rate

  • S.GANESAN

    PL SEND THE AUTHENTIC INFORMATION – 18% INTEREST CHARGING BY CUSTOMS FOR DELAYED PAYMENT DUTY.

  • Shivaraj M A

    It is 87 (Other Receipts)

  • Ashish

    IN EXCISE AUDIT WE HAVE SOME BILL THAT AUDITOR DIS-ALLOWED NOW WE REVERSE EXCISE DUTY. BUT IN COUNTING INTEREST WE HAVE QUESTION THAT WE HAVE ALREADY BALANCE IN PLA SO WE HAVE ALREADY BALANCE THAT’S WHY WE COUNT INTERST??? MY QUESTION IS INTEREST IS COUNTING OR NOT???

  • k.pachaiappan

    Dear Sir,

    pl. send customs duty interest from 1.4.2012.

    tks.
    k.pachaiappan
    pegasus

  • Shalaka Teli

    If Excise duty paid by E payment Continously 3 month duty paid on the 6th day of the month what is penalty applicable.

    Pls give reply its urgent.

    Thanks
    Shalaka

  • vishnu kumar

    Excise Duty late payment Interest Rate i will tell 18% so. 1.5 

  • Bhavesh Thakkar

    plz give code for excise for interest & penalty payment

  • how to pay the late payment charges

    how to pay the excise duty late payment of 18% in which challan we have to use

  • ADITYA SUREKA

    DEAR SIR,

    I WOULD LIKE TO KNOW IF DEBIT BALANCE CLEARANCE IS MADE IS THERE ANY OPTION FOR RULE 8 CLEARANCE OF SUBSEQUENT GOODS FROM FACTORY WITHOUT USING CENVAT BEING AVOIDED

  • limitation7

    FOR INTEREST & PENALTY

    “00380087” oTHER RECEIPT

  • kvsp sastry

    If excise duty paid late what is the rate of penalty and interest up to the date of payment…

    • Ganeshpratap

      Dear Sir

      iF EXCISE DUTY IS DELAYED AND NOT PAID WE HAVE TO PAY 18% INTEREST RATE PER ANNUM
      FROM THE DAY EXCISE IS DUE

      • rishi

        sir pls check the books

  • akash parekh

    What is the code for excise penalty & interest

  • ashok tiwari

    plz give code for excise for interest & penalty.

    Regards,
    Ashok Tiwari
    09904548401