Recovery of Duty not paid Section 11A(2B)

[Rajkumar Chandnani]

We are suppling components made to our customer made from dies owned by him and supplied to us. For some of the dies amoortisation issue was settled and we were paying duty on die ammortised cost in our invoice. however in few other dies our issue was open with customer and we were in the process of finalisation. In the mean time excise audit came and this point came up for verification and discussion.We settled the issue with our customer immediatly for pending dies and calulated the details of duty payable on such pending ammortised dies and paid along with interest and also informed Department about such payment. We also wrote letter to AC for avoiding penality and non issue of show cause notice. What is our status after payment of short duty along with interest. Can Dept give shaow cause notice? or leavy penalty ? Can we take benifit of Explanation 3 inserted to Sec 11A(2B) vide finance Act 2010 w.e.f 08.05.2010.

AI Summary

Company Avoids Penalties by Paying Duty with Interest Before Notice Under Section 11A(2B) A company was supplying components made from customer-owned dies and faced an issue with duty payment on amortized die costs. While some die amortization issues were resolved, others were pending when an excise audit occurred. The company settled the pending issues, paid the duty with interest, and informed the Department, requesting to avoid penalties and a show cause notice. The response clarified that under Section 11A(2B), if duty is paid with interest before a notice is issued, the Department cannot serve a show cause notice, thus protecting the company from further action.