Central Excise

What is Central Excise? How it differs from other duties/taxes?

"Excise', as stated in the Oxford Dictionary, was originally 'acise' , a word derived from the Latin, 'accensav', meaning 'to tax', The primary and fundamental meaning of 'excise duty' or 'Duty of Excise' is tax on articles produced or manufactured in the taxing country and intended for home consumption (i.e. consumption within the same country). It is an indirect duty which the manufacturer or producer passes on to the ultimate consumer, that is, its ultimate incidence will always be on the consumer.

How important is the role of Central Excise in India?

Central Excise revenue is the biggest single source of revenue for the Government of India.
The Union Government also 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, industrial growth, promotion of small scale industries and the like.

What are the different kinds of Excise Duties levied on goods and what are the provisions of law thereof?

Basic Excise Duty - This is charged under section 3 of the Central Excises and Salt Act, 1944 on all excisable goods other than Salt which are produced or manufactured in India at the rates set forth in the Schedule to the Central Excise Tariff Act, 1985.

Additional Duty of Excise

• Section 3 of the Additional duties of Excise (goods of Special Importance) Act, 1957 authorizes the levy and collection in respect of the goods described in the Schedule I to this Act. (Schedule I levies Additional Excise duty on goods falling under Chapter 17,24,51,52,54,55,58,59 and 60) of the Central Excise Tariff Act, 1985). This is levied in lieu of Sales Tax and is shared between Central and State Governments.
• Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 provides for the levy and collection of Additional Duties of Excise on certain textile and textile articles mentioned in the Schedule to this Act.
• Section 3 of the Khadi and other Handloom Industries Development (Additional Excise Duty on cloth) Act, 1953 authorizes the levy and collection on all cloth manufactured a duty of excise at the rate of 2.5 paisa per square meter subject to certain conditions.
• Section 3 of the Mineral Products (Additional Duties of Excise and Customs ) Act, 1958 provides for the levy and collection in respect of goods mentioned in column 1 of the Table annexed to this Act.

Does one require registration to produce/manufacture excisable goods?

Yes. Every person who produces, manufactures, carries on trade, holds private store-room or warehouse or otherwise uses excisable goods shall get registered as per the provisions of Rule 9. Section 6 of Central Excise and Salt Act, 1944 lays down the statutory provision in this respect. Exceptions to this legal requirement is embodied in Notfn. No. 36/2001-C.E.(N.T.) dt.26.06.01, wherein certain specific categories of persons/ premises have been exempted from registration.

The application for registration has to be made to the jurisdictional C. Excise officer. Manufacturers who are exempted from registration by virtue of the said Notfn.have to file a declaration with the Asstt. Commr.of their respective Divisions.

Non-obtaining of a licence under the Central Excise law is liable to punishment. Manufacturers enjoying exemption from the payment of Central Excise Duty are also exempted from licensing control subject to certain conditions as laid down in Rule 174A.

What is the significance of 'Trade Notices' under Central Excise law?

Rule 31 of the Central Excise Rules, 2002 empowers the Central Board of Excise and Customs and Commissioners to issue written instructions for any supplemental matters arising out of the Rules. This power is only to fill in the working details and are only administrative directions. Trade Notices contain such directions.

The Trade Notices have no statutory effect and their non-compliance does not amount to violation of any substantive provisions of Central Excise law attracting any penal action. They cannot alter the meaning of the words of statute nor can they be read for the purpose of controlling the plain meaning of a tariff entry.

Sometimes Trade Notices explain the existing statutory provisions and sometimes they fill up the gaps or omissions in the procedural statutory rules.

Trade Notices are binding on the Department but not on the quasi-judicial authorities, Tribunals and Courts of Law.