PENALTY UNDER SECTION 11AC OF THE CENTRAL EXCISE ACT

Querist : Anonymous (Querist) 25 June 2011 This query is : Resolved
AT THE TIME OF VISIT OF CENTRAL EXCISE OFFICERS AT THE REGISTERED PREMISES, THEY FOUND SHORTAGE IN FINAL GOODS WHEN COMPARED WITH THE MAINTAINED RECORD TO THE TUNE 2% APPROXIMATELY. THE REASON MAY BE DUE TO AVERAGE WEIGHMENT OF LYING STOCK SINCE THERE WAS NO ACTUAL WEIGHT OF ENTIRE LYING STOCK. INVOLVED CENTRAL EXCISE DUTIES DEPOSITED AT SPOT. WHETHER THE SHOW CAUSE NOTICE MAY BE ISSUED FOR THE IMPOSITION OF PENALTY UNDER SECTION 11AC OF THE CENTRAL EXCISE ACT.

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soumitra basu (Expert) 28 June 2011
It is the discretion of the Department whether this shortage shall be treated as excess production outside the books or normal defects in weighing goods.
However, no penalty is leviable for 2% shortage.

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