Penalty for short or non levy of excise duty establishes tiered sanctions, including heightened liability for fraudulent evasion.

Section 11AC establishes a tiered penalty scheme for under levy, non levy or erroneous refund of excise duty: full penalty where under levy results from fraud, collusion, willful misstatement, suppression of facts or intent to evade; a reduced records based penalty where specified records disclose the transactions; a further reduced penalty where duty and interest are paid promptly after the officer's order; and automatic modification of penalty and interest following appellate adjustment, with time for payment of increased amounts counted from the appellate order.

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