Effect payment of penalty 1% under sub section (6) of section 11A of CEA

[Pradeep Jain]

Sir, Differential excise duty paid during the audit from 2010to Mar 14 along with interest .Now department insisting to pay penalty under above section. if we pay to same department will not service notice under para(i) of sub-section (7) of section 11A and all proceedings deemed to be concluded. Please confirm & after that any restrictions  to the customer to avail CENVAT credit of such payment of Differential Excise duty or their jurisdiction may issue SCN against such CENVAT Credit.

Regds

Pradeep

AI Summary

Understanding 1% Penalty under Section 11A(6) & CENVAT Credit Transfer Restrictions in Excise Duty Settlements A forum participant inquired about the implications of paying a 1% penalty under Section 11A(6) of the Central Excise Act after settling differential excise duty and interest for audits from 2010 to March 2014. Two responses clarified that upon payment and written notification to the department, further action may be avoided. However, concerns were raised about the ability to pass on CENVAT credit, as Rule 9(b) of the CENVAT Credit Rules 2004 restricts credit transfer if duties were unpaid or short-paid due to fraud. Compliance with Subsection 6 would conclude proceedings, but supplementary invoices are necessary for credit transfer.