Fraud vitiates limitations under Section 11A of the Central Excise Act, allowing notices despite elapsed time where fraud or suppression of facts is established.

ORDER :

1. The present writ petition has been filed assailing the show cause notice dated 20.06.2025, issued under Section 11A of Central Excise Act, 1944 (for short ‘the Act’), alleging that the issue notice is beyond limitation.

2. It is further alleged that the notice itself could not have been issued under the Excise Act to the petitioners, who were not the manufacturers, but are the proprietors concerned for engaging trading business and have received goods from another manufacturers.

3. Learned counsel appearing on behalf of the petitioners has relied on Provisions of Section 11A of the Act to submit that any notice issued after a period of five years from the relevant date, would have no force and the same deserves to be quashed on the same that count alone.

4. Learned counsel for the petitioners relies on the judgment passed by the Hon’ble Apex Court in the case of “J.K. Spinning & Weaving Mills Ltd. & Anr. vs. Union of India & Ors. 1987(32) E.L.T. 234 (S.C.).

5. We have considered the submissions and also perused the judgment passed by the Apex Court.

6. It is a case where the petitioners have shown themselves as manufacturers and supplied goods to the retailers and also collected GST, the so called manufacturers from which they alleged to have received goods, were never paid any GST nor any invoice was issued in their name. The question, therefore, arises whether the petitioners can be said to be the retailers or suppliers, and not the manufacturers. The issue requires to be examined by the Excise Authority after they receive the reply and the facts which are brought on record.

7. As regards, the issuance of notice under Section 11A of the Act is concerned, we find that the period for which the notice has been issued, starts from FY 2018-2019 upto FY 2021-2022.

8. Provision of Section 11A of the Act reads as under :

[11A. Recovery of duties not levied or not paid or short- levied or short-paid or erroneously refunded.— (1) Where any duty of excise has not been levied or paid or has been short- levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful misstatement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,—

(a) the Central Excise Officer shall, within [two years] from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice;

(b) the person chargeable with duty may, before service of notice under clause (a), pay on the basis of,—

(i) his own ascertainment of such duty; or

(ii) the duty ascertained by the Central Excise Officer,

the amount of duty along with interest payable thereon under Section 11 -AA.

(2) The person who has paid the duty under clause (b) of sub-section (1), shall inform the Central Excise Officer of such payment in writing, who, on receipt of such information, shall not serve any notice under clause (a) of that sub- section in respect of the duty so paid or any penalty leviable under the provisions of this Act or the rules made thereunder.

(3) Where the Central Excise Officer is of the opinion that the amount paid under clause (b) of sub-section (1) falls short of the amount actually payable, then, he shall proceed to issue the notice as provided for in clause (a) of that sub-section in respect of such amount which falls short of the amount actually payable in the mann