Section II A of the Central Excise Act has been amended by clause 97 of the Finance Act, 2000. By the clause (97 (b), time limit to serve notice on persons in clause where duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded has been increased from 6 months to 1 year. finance Act, 2000 has come into force w.e.f. 12-5-2000. In this regard the following two questions have been raised by field formations:

(1)    Where the show-cause not ice period of 6 months under the erstwhile section II A was applicable and it has expired before 12-5-2000, whether the provision of amended Section II A can be invoked, i.e. show-cause notices can be issued within the extended period of 1 year, for issuing show-cause notices for recovering duty short-levied/not levied.

(2)    Where the said time limit of 6 months for the show-cause notice expires on or after 12-5-2000, whether show-cause notices can be issued within 1 year from the relevant date as per amended Section II A.

        The issue has been examined in consultation with the Ministry of Law and the above two questions are clarified as follows:

(1)    Where the show-cause notice period of six months under the erstwhile Section II A was applicable and had expired before 12-5-2000, the provision of amended section can not be invoked for issuing show-cause notice for recovering duty short levied / not levied.

(2)    Where the said show-cause notice period of six months for recovery expires on or after 12-5-2000 i.e. the date of coming into force of the Finance Act, 2000, the Department can issue show-cause notices upto a period of 1 year from the relevant date.

        This may be brought to the notice of field formations. 

Receipt of this circular may please be acknowledged.

Hindi version will follow.