DEMAND OF DUTY AND ERRONEOUS REFUNDS - Central Excise Practice Manual (OLD) - Central Excise

9. DEMAND OF DUTY AND ERRONEOUS REFUNDS 9.1 Demand Notice: If the duty has not been levied or not paid or short levied or short paid or erroneously refunded, the Department is empowered to demand the same under Section 11A (1) of the Act. The notice would be issued detailing the basis of such demand and providing an opportunity to show cause as to why the proposed action in the notice should not be initiated against the noticee. The noticee would also be given an opportunity to putforth the arguments in person before the adjudicating authority at the time of personal hearing. The arguments in defence of the noticee in writing and oral submissions would be taken into consideration by the adjudicating authority while passing the order under Section 11A (2) of the Act. If the assessee is aggrieved of the order, he can seek remedy in the higher Appellate forum as explained in Chapter 15 of this guide. 9.2 Limitation of time: The notice is required to be issued within one year of the 'relevant date' as defined under Section 11A (1) of the Act. Relevant date in respect of the assessees is generally the date of filing of the statutory return relating to the period to which the demand pertains. If return has not been filed, the due date on which the return ought to have been filed would be reckoned as the relevant date. In the case of Provisional assessments, the relevant date counts from the date of adjustment of duty after finalization of the assessment. As regards the demand relating to erroneous refund, the date of payment of refund shall be the relevant date. In other circumstances, the date of payment of duty is the relevant date. If the non-levy or short levy or non payment or short payment or erroneous refund is by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of the Act or the Rules with intent to evade payment of duty, the time limit of one year can extend upto 5 years under the provisions of the proviso to Section 11A (1) of the Act.