INFORMATION TECHNOLOGY TRAINING PROGRAM

PROJECT ON
CENTRAL EXCISE ACT

BY:
PALIKA SHARMA
ITT Student: CRO0425536
Batch: 718 Roll No: 21
Observer: Sanjay Kishore
IT Trainer

INFORMATION TECHNOLOGY TRAINING CENTRE OF JAIPUR BRANCH OF ICAI

ICAI BHAWAN, D1 INDUSTRIAL AREA,
JHALANA DOONGRI , JAIPUR -302004

CONTENTS

CENTRAL EXCISE DUTY-1944

INTRODUCTION
HISTORY
CONSTITUTIONAL BACKGROUND
TAX
PAYERS
ASSISTANCE
RESPONSIVNES
RULES FOR LEVY OF TAX
TYPES OF EXCISE DUTY
CLASSIFICATION OF GOODS
VALUATION
REGISTRATION
CLEARNCE OF GOODS
WAREHOUSE
MERITS OF EXCISE DUTY
CRITICISMS
CONCLUSION
BIBLIOGRAPHY

AND

INTRODUCTION
An Excise or Excise tax (sometimes called an Excise duty) is a type of tax
charged on goods produced within the country (as opposed to customs
duties, charged on goods from outside the country). It is a tax on the
production or sale of a good.

CENTRAL EXCISE DUTY-1944

Typical examples of Excise duties are taxes on tobacco, alcohol and
gasoline.

Definition
The Oxford Dictionary gives the origin of the word to be the Dutch accijns,
it presumed to originate from the Latin accensare "to tax".
The New Oxford English Dictionary says the same thing: "a tax levied on
certain goods and commodities produced or sold within a country
and on licenses granted for certain activities".
Adam Smith says, "The motive for the implementation of Excise should
be nothing more than to curb the pursuit of goods and services
harmful to our health and morals.
Samuel Johnson, meanwhile, is somewhat more harsh in his 1755
dictionary: "Excise - A hateful tax levied on commodities, and adjudged
not by the common judges of property, but wretches hired by those to
whom Excise is paid."

Features of Excise duty

Deducing from the types of goods, services and areas listed as
excisable by many governments, and considering the thinkers' comments,
a logical conclusion might be that Excise duty was originally invented for
some or all of the following reasons:

to protect people
o from harming their health by abusing substances such as
tobacco and alcohol, thus making Excise a kind of sumptuary
tax
o from harming themselves and others indirectly and morally by
engaging in activities such as gambling and prostitution (see
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CENTRAL EXCISE DUTY-1944

below) (including soliciting and pimping) thus making it a type
of vice tax or sin tax
o from harming those around them and the general environment,
both from overuse of the above-mentioned substances, and
including curbing activities contributing to pollution (hence the
tax on hydrocarbon oil and of other environmental taxes, as in
the UK), or from harming the natural environment (hence the
tax on hunting) - thus also making Excise a kind of pigovian tax.
to provide monies needed
o For the extra healthcare and other public expenditures which
will be needed as a direct or indirect result of excisable
activities, such as lung cancer from smoking or road accidents
resulting from drink-driving.
o For defense - including taxation directly levied on other
countries' militaries and/or governments, such as the UK's
taxation on "visiting forces".

OBJECTIVE
After going through this lesson you should be able to understand:
Meaning and nature of Excise duty
Various concept and definitions used in Central Excise Act
Rates of Excise duty
Classification and Valuation of goods for Excise purpose
When and how Excise duty is paid
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CENTRAL EXCISE DUTY-1944

Registration and clearance of goods; and
Scheme of setoff of the Excise duty.

NATURE OF EXCISE DUTY

As per section 3 of Central Excise Act (CEA) Excise duty is levied if: 1) There is a good.
2) Goods must be moveable
3) Goods are marketable
4) Goods are mentioned in the central Excise tariff act (CETA).
5) Gods are manufactured in India.

History and developments

5

CENTRAL EXCISE DUTY-1944

Central Excise duty is an indirect tax levied on goods manufactured in
India. The tax is administered by the Central Government under the
authority of Entry 84 of the Union List (List 1) under Seventh
Schedule read with Article 226 of the Constitution of India.

The Central Excise duty is levied in terms of the Central Excise Act,
1944 and the rates of duty, ad valorem or specific, are prescribed
under the Schedule I and II of the Central Excise Tariff Act, 1985. The
taxable event under the Central Excise law is manufacture and the
liability of Central Excise duty arises as soon as the goods are
manufactured. The Central Excise Officers are also entrusted to
collect other types of duties levied under Additional Duties (Goods of
Special Importance) Act, Additional Duties (Textiles and Textiles
Articles) Act, Cess etc.

Till 1969, there was physical control system wherein each clearance
of manufactured from the factory was done under the supervision of
the Central Excise Officers. Introduction of Self-Removal procedure
was a watershed in the Excise procedures. Now, the assessees were
allowed to quantify the duty on the basis of approved classification list
and the price list and clear the goods on payment of appropriate duty.

CENTRAL EXCISE DUTY-1944

Constitutional back ground
Constitution of India is foundation and source of powers to all laws in
India. India is a Union of States. The structure of Government is federal in
nature. Government of India (Central Government) has certain powers in
respect of whole country. India is divided into various States and Union
Territories and each State and Union Territory has certain powers in respect
of that particular State. Article 246 of our Constitution indicates bifurcation
of powers to make laws, between Union Government and State
Governments. Parliament has exclusive powers to make laws in respect of
matters given in list I of the Seventh Schedule of the Constitution (called
"Union List''). Entry 84 in Union List reads as follows: Entry No. 84 - Duties of Excise on tobacco and other goods
manufactured or produced in India except alcoholic liquors for human
consumption, opium, narcotics, but including medical and toilet
preparations containing alcohol, opium or narcotics.
Power to impose Excise on alcoholic liquors, opium and narcotics is
granted to States under entry No. 51 of list II of Seventh Schedule to
the Constitution and it is called 'State Excise'. The Act, Rules and
rates for Excise on liquor are different for each State.Thus, power to
levy Central Excise duty by Union Government is clearly based on
constitutional authority.

CENTRAL EXCISE DUTY-1944

Tax payers assistance and responsiveness

The CBEC have issued instructions from time to time for rendering
assistance to the taxpayers in the Commissionerates of Central
Excise and Divisional Offices.

These offices are duty bound to Central Excise Law, procedure, tariff
and exemptions etc.

The Commissioners of Central Excise are required to post

knowledgeable officers of appropriate rank, senior Inspector or
Superintendent to be in-charge of "Tax-payers' Assistance Unit" in
each Commissionerate and Divisional headquarter. The officer will
have easy access to the Deputy/Assistant Commissioners,
Additional/Joint Commissioners and Commissioner to seek their
advice and guidance on the spot in case of genuine doubts.

The "Tax-payers' Assistance Unit" in addition to rendering advice to

the assessees, should also help them in meeting the officer
concerned for necessary guidance, and clarification, where required.
In order to have a responsive tax administration, the Board has decided
that all intimations, declarations and queries received from the Members of
trade and industry should be replied to in a time bound manner and with a
sense of responsibility and accountability. In order to achieve this, the
following directions have been issued to the Central Excise field formations:
(1) All declarations, intimations, etc. when send by FAX, e-mail, by
post or by Courier shall be accepted by the field formations.
(2) Appointments should be given on e-mail on request from the
trade;
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CENTRAL EXCISE DUTY-1944

(3) All queries by e-mail should be accepted and the replies sent by
e-mail;
(4) Any query received from the trade must be answered within a
maximum of four weeks from the date of receipt

Rules for levy of central Excise

In India, Excise duty is levied in accordance with the provisions of Central
Excise Act, 1944. It is the basic Act which lays down the law relating to levy and
collection of Central Excise duty. The Act empowers the Central Government to
make rules in pursuance of the Act. According, the following set of rules has been
framed: The Central Excise Rules, 2002 (Section 143 of the Finance Act, 2002)
The Central Excise (Settlement of Cases) Rules, 2001
The Central Excise (Removal of Goods at Concessional Rate of Duty for
Manufacture of Excisable Goods) Rules, 2001
Central Excise Valuation (Determination of Price of Excisable Goods) Rules,
2000
Consumer Welfare Fund Rules, 1992
The Central Excise (Advance Rulings) rules, 2002
Central Excise (Compounding of Offences) Rules, 2005
The Central Excise law is administered by the Central Board of Excise and
Customs (CBEC). Central Board of Excise and Customs is a part of the Department
of Revenue under the Ministry of Finance, Government of India. It deals with the
tasks of formulation of policy concerning levy and collection of Customs and Central
Excise duties, prevention of smuggling and administration of matters relating to
Customs, Central Excise and Narcotics to the extent under CBEC's purview. The
Board is the administrative authority for its subordinate organizations, including
9

CENTRAL EXCISE DUTY-1944

Custom Houses, Central Excise Commissionerates and the Central Revenues
Control laboratory.

TYPES OF EXCISE DUTY

Excise duties are of following types
1. Duties under Central Excise Act - Basic duty and special duty of Excise
are levied under Central Excise Act. Basic Excise duty (also termed as
Cenvat as per section 2A of CEA added w.e.f. 12-5-2000) is levied at the
rates specified in First Schedule to Central Excise Tariff Act, read with
exemption notification, if any. The general rate is 16% w.e.f. 1-3.2001.
There is partial exemption of 8% and 4 % to a few products. Some
commodities like pan masala, cars etc. are leviable with special duty.
2. National Calamity Contingent Duty (NCD) - A 'National Calamity
Continent Duty' has been imposed on cigarettes, biris, pan masala and
miscellaneous tobacco products w.e.f. 1-3-2001.
3. Additional Duty on goods of special importance - Some goods of special
importance are levied Additional Excise under Additional Duties of Excise
(Goods of Special Importance) Act, 1957.
4. Additional Duty on Textile Articles - Additional Excise duty of 15% on
certain textile and textile articles like articles of silk / wool / cotton, manmade filaments, metallised yarn etc. is imposed under Additional Duties of
Excise (Textile and Textile Articles) Act, 1978. The revenue from these
levies goes fully to Central Government.
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CENTRAL EXCISE DUTY-1944

5. Duty on Medical and Toilet preparations - A duty of Excise is imposed on
medical preparations under Medical and Toilet Preparations (Excise
Duties) Act, 1955.

CLASSIFICATION OF GOODS
There are thousands of varieties of manufactured goods and all
goods cannot carry the same rate or amount of duty. It is also not possible
to identify all products individually. It is, therefore, necessary to identify the
numerous products through groups and sub-groups and then to decide a
rate of duty on each group/sub-group. This is called 'Classification' of a
product, which means determination of heading or sub-heading under
which the particular product will be covered. Excise is a duty on excisable
goods manufactured or produced in India. The liability of payment of
Excise is on the Manufacturer. Once the liability of payment is established,
the next question is what the amount of duty payable is. The two step
process is
(a)Correctly classify the goods
(b) Find its assessable value.
The Central Excise Tariff Act, 1985 (CETA) classifies all the goods under
91 chapters (in fact 96 chapters out of which 5 are blank) and specific
code is assigned to each item. There are over 1,000 tariff headings and
2,000 sub-headings. This classification forms basis for classifying the
goods under particular Chapter head and Sub-head to prescribe duty to
be charged on that particular product.
Salient features of the tariff are as follows:-

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CENTRAL EXCISE DUTY-1944

(1)CETA is based on HSN - CETA is based on International convention of
Harmonized System of Nomenclature (HSN), called Harmonized
Commodity Description and Coding System. This is an International
Nomenclature standard adopted by most of the Countries to ensure
uniformity in classification in International Trade. Though CETA
generally follows HSN pattern, it is not a copy of HSN. Often, there are
wide variations between HSN and CETA. The CETA also varies
significantly from Customs Tariff, though both are based on HSN
(2)CETA contains two schedules - CETA consists of two schedules - the
first schedule gives basic Excise duties (i.e. Cenvat duty) leviable on
various products, while second schedule gives list of items on which
special Excise duty is payable. Second schedule contains only few
items. It has been clarified that the tariff headings given in second
schedule will be interpreted in the same way as those in first schedule.
Items included in second schedule are already covered and included in
first schedule.
(3)Sections and Chapters of CEA - Tariff is divided in 20 sections. Each of
20 sections is related to a broader class of goods e.g. Section I is
'Animal Products', Section VII is 'Plastics and Articles thereof', Section
XI is 'Textile and Textile Articles', Section XVII is 'Vehicles, Aircrafts,
Vessels and associated transport equipment, etc. Section Notes are
given at the beginning of each Section, which govern entries in that
Section. These notes are applicable to all Chapters in that section.
Section divided in Chapters - Each of the sections is divided into
various Chapters and each Chapter contains goods of one class. For
example, Section XI relates to Textile and Textile Articles and within
that Section, Chapter 50 is Silk, Chapter 51 is Wool, Chapter 52 is
Cotton, Chapter 53 is other vegetable textile fabrics, Chapter 61 is
Articles of Apparel and so on. There are 96 chapters out of which five
are blank.
Grouping of goods - The tariff is designed to group all goods relating to
same industry and all the goods obtained from the same raw material
under one Chapter in a progressive manner as far as possible. So far as
practicable, Goods are classified beginning with raw materials and ending
with finished products within the same chapter.
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CENTRAL EXCISE DUTY-1944

Six Digit classifications - All excisable goods are classified using 4 digits
system and 2 more digits are added for further sub-classification whenever
required. In above example, first two digits i.e. '50' related to the Chapter
Number, next two digits e.g. 01 or 02 relate to heading of the goods in that
chapter and last 2 digits indicate sub-heading.
(4)Broad grouping in CETA - Following is broad grouping of goods in
CETA:
Animal Products (Section I - Chapters 2 to 5)
Vegetable Products (Section II - Chapters 7 to 14)
Animal or vegetable fats (Section III - Chapter 15)
Prepared foodstuffs, beverages (Section IV - Chapters 16 to 24)
Mineral Products (Section V - Chapters 25 to 27)
Chemicals, Fertilizers, soap etc. (Section VI - Chapters 28 to 38)
Plastics and Rubber and their articles (Section VII - Chapters 39
and 40)
Leather and articles (Section VIII - Chapters 41 to 43)
Wood, cork, straw and their articles (Section IX - Chapters 44
and 46)
Pulp, Paper, Paper-board and articles (Section X - Chapters 47
to 49)

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CENTRAL EXCISE DUTY-1944

VALUATION
1. Value under the Central Excise Act, 1944
1.1 Value of the excisable goods has to be necessarily determined when
the rate of duty is on ad-valorem basis. Accordingly, under the Central
Excise Act, 1944 the following values are relevant for assessment of duty.
Transaction value is the most commonly adopted method.
(i) Transaction value under Section 4.
(ii)

Value determined on basis of maximum Retail Sale Price

as per Section 4A.

(iii
Tariff value under Section 3.
)
2. Transaction Value
(2.1) Section 4 of the Central Excise Act, as substituted by section 94 of the
Finance Act, 2000(No.10 of 2000),has come into force from the 1st day of
July 2000. This section contains the provision for determining the
Transaction value of the goods for purpose of assessment of duty.
(2.2) for applicability of transaction value in a given case, for assessment
purposes, certain essential requirements should be satisfied. If any one of
the said requirement is not satisfied, then the transaction value shall not be
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CENTRAL EXCISE DUTY-1944

the assessable value and value in such case has to be arrived at under the
valuation rules notified for the purpose. The essential ingredients of a
Transaction value are:
(i) The goods are sold by an assessee for delivery at the time of
place of removal. The term "place of removal" has been defined
basically to mean a factory or a warehouse;
(ii) The assessee and the buyer of the goods are not related; and
(iii The price is the sole consideration for the sale.
)
(2.3) The definition of "transaction value" needs to be carefully taken note
of as there is fundamental departure from the erstwhile system of valuation
that was essentially based on the concept of Normal Wholesale Price,
even though sales were effected at varying prices to different buyers or
class of buyers from factory gate or Depots etc. had to be determined.
(2.4)The new section 4 essentially seeks to accept different transaction
values which may be charged by the assessee to different customers, for
assessment purposes so long as these are based upon purely commercial
consideration where buyer and the seller have no relationship and price is
the sole consideration for sale. Thus, it enables valuation of goods for
Excise purposes on value charged as per commercial practices rather than
looking for a notionally determined value.
(2.5)Transaction value would include any amount which is paid or payable
by the buyer to or on behalf of the assessee, on account of the factum of
sale of goods. In other words, if, for example, an assessee recovers
advertising charges or publicity charges from his buyers, either at the time
of sale of goods or even subsequently, the assessee cannot claim that
such charges are not to be included in the transaction value. The law
recognizes such payment to be part of the transaction value that is
assessable value for those particular transactions. Certain other elements
which are included in the Transaction value are, as follows:
(i)

Receipts/recoveries or charges incurred or expenses provided for

in connection with the manufacturing, marketing, selling of the
excisable goods. In other words, whatever elements which enrich
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CENTRAL EXCISE DUTY-1944

the value of the goods before their marketing and were held by
Honble Supreme court to be includible in "value" under the
erstwhile section 4 would continue to form part of section 4 value
even under new section 4 definition.
(ii) If in addition to the amount charged as price from the buyer, the
assessee recovers any other amount by reason of sale or in
connection with sale, then such amount shall also form part of the
transaction value. For example if assessee splits up his pricing
system and charges a price for the goods and separately charges
for packaging or warranty, the packaging charges will also form
part of assessable value as it is a charge in connection with
production and sale of the goods recovered from the buyer. In this
context, it may be clarified that it is immaterial whether the
warranty is optional or mandatory. Since the value can be different
for different transactions, wherever warranty charges are paid or
payable to the assessee, in those transactions warranty charges
shall form part of the assessable value. In those transactions
where warranty charges are not recovered, the question of
including warranty charges in transaction value does not arise.
(iii) Interests for delayed payments are a normal practice in industry.
Interest under a financing arrangement entered between the
assessee and the buyer relating to the purchase of excisable
goods shall not be regarded as part of the assessable value
provided that:
(a the interest charges are clearly distinguished from the price
) actually paid or payable for the goods;
(b the financing arrangement is made in writing; and
)
(c) where required, assessee demonstrates that such goods are
actually sold at the price declared as the price actually paid or
payable.
(iv Discount of any type or description given on any normal price
)
payable for any transaction will not form part of the transaction
value for the goods, e.g. quantity discount for goods purchased or
cash discount for the prompt payment etc. will therefore not form
part of the transaction value. However, it is important to establish
16

CENTRAL EXCISE DUTY-1944

that the discount has actually been passed on to the buyer of the
goods. The differential discounts extended as per commercial
considerations on different transactions to unrelated buyers if
extended can not be objected to and different actual prices paid or
payable for various transactions are to be accepted. Where the
assessee claims that the discount of any description for a
transaction is not readily known but would be known only
subsequently as for example, year end discount the
assessment for such transactions may be made on a provisional
basis. However, the assessee has to disclose the intention of
allowing such discount to the department and make a request for
provisional assessment.

REGISTRATION

Introduction
For the administration of the Central Excise Act, 1944 and the Central
Excise (No.2) Rules, 2001 (hereinafter referred to as the said Rules)
manufacturers of excisable goods or any person who deals with excisable
goods, with some exceptions, are required to get the premises registered
with the Central Excise Department before commencing business.

Persons requiring registration

In accordance with Rule 9 of the said Rules and Notifications issued
under rules 18 and 19 of the said Rules, as the case may be, the following
category of persons are required to register with jurisdictional Central
Excise Officer in the Range office having jurisdiction over his place of
business/factory:
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CENTRAL EXCISE DUTY-1944

(i)

Every manufacturer of excisable goods (including Central/State

Government undertakings or undertakings owned or controlled by
autonomous corporations) on which Excise duty is leviable .

(ii) Persons who desire to issue CENVATABLE invoices under the

provisions of the CENVAT Credit Rules, 2001.
(iii) Persons holding private warehouses.
(iv Persons who obtain excisable goods for availing end-use based
)
exemption notification.
(v) Exporters manufacturing or processing export goods by using
duty paid inputs and intending to claim rebate of such duty or by
using inputs received without payment of duty and exporting the
finished export goods.
Separate registration is required in respect of separate premises except in
cases where two or more premises are actually part of the same factory
(where processes are interlinked), but are segregated by public road, canal
or railway-line. The fact that the two premises are part of the same factory
will be decided by the Commissioner of Central Excise based on factors,
such as:
(1) Interlinked process product manufactured/produced in one
premise are substantially used in other premises for manufacture
of final products.
(2) Large number of raw materials are common and
received/proposed to be received commonly for both/all the
premises
(3) Common electricity supplies.
(4) There is common labour /work force
(5) Common administration/ works management.
(6) Common sales tax registration and assessment
(7) Common Income Tax assessment
(8) Any other factor as may be indicative of inter-linkage of the
manufacturing processes.
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CENTRAL EXCISE DUTY-1944

Exemption from Registration

The Central Board of Excise and Customs (CBEC), by Notification
No. 36/2001-CE (NT) dt.26.6.2001, has exempted specified categories of
persons/premises from obtaining registration, as follows:
(i)

Persons who manufacture the excisable goods, which are

chargeable to nil rate of Excise duty or are fully exempt from duty
by a notification.

(ii)

Small scale units availing the slab exemption based on value of

clearances under a notification. However, such units will be
required to give a declaration (Annexure-1)once the value of their
clearances touches Rs.90 lakhs.

CLEARNCE OF GOODS
Clearance means taking goods out of factory. Thus, finished goods can
be stored not removed in the place of manufacture (factory) without
payment of duty. There is not time limit for removal of gods from place of
manufacture i.e., factory. The records have to be maintained by
manufacturer indicating particulars regarding
1. Description of goods manufactured or produced
2Opening Balance of goods manufactured or produced.
3. Quantity produced or manufactured.
4. Stock of goods.
5. Quantity of goods removed
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CENTRAL EXCISE DUTY-1944

6. Assessable Value
7. Amount of duty payable; and
8. Amount of duty actually paid.
The record should be preserved for 5 years. If the records are not
maintained then penalty up to duty payable can be imposed and goods
can be confiscated. If goods are stored at any other place other than
factory, then goods can be cleared from factory without payment of duty, if
commissioner permits.

WAREHOUSING
Introduction
Facility of warehousing of excisable goods without payment of duty
has been provided in respect of the specified commodities by Notification
No.47/2001CE (NT) dated 26th June, 2001. The Central Board of Excise
and Customs has also specified detailed procedure including the
conditions, limitations and safeguards for removal of excisable goods subrule (2) of Rule 20 of the Central Excise (No.2) Rules 2001 (hereinafter
referred to as the said Rules)
Any goods warehoused may be left in the warehouse in which they are
deposited, or in any warehouse to which such goods have been removed,
till the expiry of three years from the date on which such goods were first
warehoused.

Place of registration of warehouse

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CENTRAL EXCISE DUTY-1944

Commissioner of Central Excise will specify the places under his
jurisdiction where warehouse can be registered, by issuing Trade Notice.
Any person desiring to have warehouse will get himself registered under
the provisions of Rule 9 of the said Rules.

Procedure for warehousing of excisable goods removed from a factory or

a warehouse
The consignor (i.e. the manufacturer or the registered person of the
warehouse) shall prepare an application for removal of goods from a
factory or a warehouse to another warehouse in quadruplicate in the
specified Form (Annexure-25).
The consignor shall also prepare an invoice in the manner specified in Rule
11 of the said Rules in respect of the goods proposed to be removed from
his factory or warehouse.
The consignor shall send the original, duplicate and triplicate application
and duplicate invoice along with the goods to the warehouse of destination.
The consignor shall send quadruplicate copy of the application to the
Superintendentin-charge of his factory or warehouse within twenty-four
hours of removal of the consignment.
On arrival of the goods at the warehouse of destination, the consignee (i.e.
the registered person of the warehouse who receives the excisable goods
from the factory or a warehouse) shall, within twenty-four hours of the
arrival of goods, verify the same with all the three copies of the application.
The consignee shall send the original application to the Superintendent-incharge of his warehouse, duplicate to the consignor and retain the triplicate
for his record.
The Superintendent-in-charge of the consignee shall countersign the
application received by him and send it to the Superintendent-in-charge of
the consignor.
The consignor shall retain the duplicate application duly endorsed by the
consignee for his record.
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CENTRAL EXCISE DUTY-1944

Accountal of goods in a warehouse

The registered person of the warehouse shall maintain a register
showing all entries in to and removals of the goods from his warehouse and
shall indicate the value, quantity of the goods removed, their marks and
numbers as well as the rate of duty and amount of duty involved. The
processes carried out on the warehoused goods, if any, shall also be
recorded.
The first and last pages of the register should be pre-authenticated by the
owner of the warehouse or his authorized agent.

Revoked or suspended registration of a warehouse

If the registration of a warehouse is revoked or suspended, the
excisable goods lodged therein shall either be cleared for home
consumption on payment of duty or shall be removed to another
warehouse without payment of duty.

Warehouse to store goods belonging to the registered person

A warehouse shall be used solely for storing excisable goods
belonging to the registered person of the warehouse alone. He shall not
admit or retain in the warehouse any excisable goods on which duty has
been paid;
The Commissioner of Central Excise having jurisdiction over the
warehouse may permit storage of excisable goods along with the excisable
goods belonging to another manufacturer;

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CENTRAL EXCISE DUTY-1944

The Commissioner of Central Excise having jurisdiction over the
warehouse may permit the registered person of the warehouse to store
duty paid excisable goods or duty paid imported goods along with non-duty
paid excisable goods in the warehouse.

Merits of central Excise duty

Central Excise revenue is the biggest single source of revenue for the
Government of India. The Union Government tries to achieve different
socio-economic objectives by making suitable adjustments in the scope
and quantum of levy of Central Excise duty. The scheme of Central Excise
levy is suitably adapted and modified to serve different purposes of price
control, sufficient supply of essential commodities, industrial growth, and
promotion of small scale industries and like Authority for collecting the
Central
Excise
duty.
Article 265 of the Constitution of India has laid down that both levy and
collection of taxes shall be under the authority of law. The Excise duty is
levied in pursuance of Entry 45 of the Central List in Government of India
Act, 1935 as adopted by entry 84 of List I of the seventh Schedule of the
Constitution of India. Charging section is Section 3 of the Central Excises
and
Salt
Act,
1944.

Criticisms
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CENTRAL EXCISE DUTY-1944

Critics of Excise tax - such as Samuel Johnson, above - have interpreted
and described Excise duty as simply a government's way of levying further
and unnecessary taxation on the population. The presence of "refunds of
duty" under the UK's list of excisable activities has been used to support
this argument, as it results in taxation being implemented on persons even
where they would normally be exempt from paying other types of taxes
hence why they are getting the refund in the first place.
Furthermore, Excise is often somewhat similar to other taxes and
sometimes doubles up with them, as in the above example, or as in the
case of customs duties: since the two taxes largely apply to the same types
of goods, people are forced to pay tax twice over on the same items
(except in the case of duty-free) - once through Excise upon purchase and
a second time around through customs duties upon transportation. (A
justification for this is that the country the items are being entered into is
applying the customs partly for the same reasons as the original Excise
was charged, as it is the country of import which will suffer the ill
environmental, health and social effects of, say, the cigarettes and alcohol
being brought in; thus customs has many similar pros and cons as has
Excise.)
Drugs
There are at least two major criticisms of Excise legislation on drugs One is that, while it acts as a deterrent, it is also been argued that the
state in question is able to gain revenues, while the legislation
protects the anonymity of the dealers - as in the example of Kansas:
"A dealer is not required to give his/her name or address when
purchasing stamps and the Department is prohibited from sharing
any information relating to the purchase of drug tax stamps with law
enforcement or anyone else."[13]
The other criticism is that as far as legal drugs are concerned (ie.
medicines and pharmaceuticals) these are also subject to taxation
in some countries, notably India. This has raised controversy about
the fact that this tax leads to hugely inflated prices of ordinary and
even potentially lifesaving medication.

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CENTRAL EXCISE DUTY-1944

CONCLUSION
Central Excise duty is an indirect tax levied on goods manufactured in
India. The tax is administered by the Central Government. Government
earns revenue by Excise duty and invests this earned revenue for public
welfare and control production of harmful product.

BIBLIOGRAPHY

BUSINESS TAXATION (T.S.REDDY AND HARI PRASAD REDDY)

WWW.GOOGLE.COM
WWW.WIKIPEDIA.COM
WWW.CENTRALEXCISE.CO.IN
BUSINESS ARTICLES.ETC.

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