Central excise act
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This document discusses the laws related to central excise duty in India. It outlines the Central Excise Act of 1994, Central Excise Tariff Act of 1985, and Central Excise Rules of 1944 as the basic laws governing the levy and collection of central excise duties. It also describes the conditions for goods to be subject to central excise duty, which are that the goods must be movable, marketable, excisable as defined in the Tariff Act, and manufactured/produced in India. Finally, it discusses the different bases for valuation of excise duty, including specific duty, tariff duty, maximum retail price, and ad valorem basis, with ad valorem being the most common
Central excise act
- 1. BY VINOD K RAJU MUSALIAR COLLEGE PATHANAMTHITTA
- 2. 1.Central Excise Act 1994 2.Central Excise tariff Act 1985 3.Central Excise Rules ,1944
- 3. This is the basic law related to the levy and collection of duties of central excise .However this Act does not contain the rate at which duties are imposed
- 4. This Act classifies various goods on which central excise duties are levied and prescribes the rates at which the duty is payable
- 5. All manufacturers of excisable goods are required to register under these rules .The registration is valid as long as production activity continues and no renewals are necessary
- 6. 1.Basic duty of central excise This duty is levied at the rates specified in the First schedule to Central Excise Tariff Act 1985 2. Specific duty of excise Some commodities like pan masala and cars have special excise duties levied on them .These items are covered under in schedule II to the Central Excise Tariff
- 7. 4.Excise duty on clearances by 100 % EOUs 100 per cent Export –oriented Units are expected to export all their production .However ,if they clear their final product in the domestic tariff area,the rate of excise duty will be equal to that of the customs duty on like article imported in India
- 8. Taxable event for charge of duty of central excise is the manufacturer or production of goods in India In this context ,the Supreme Court has observed : Excise duty is not directly on the goods ,but manufactured thereof. Though both excise duty and sales duty levied with reference to goods ,the two are very different imposts.In one case ,the imposition is on the act of manufactured or production ,while in the other it is on the act of sale.
- 9. For condition must be present for the charge of central excise duty: 1.The duty is on goods 2.The goods must be excisable 3 .The goods must be manufactured or produced 4.Such manufacture or production must be take place in India
- 10. For an item to be considered goods for the purpose of the levy of central excise duty ,it must satisfy two requirements: 1.Movability Goods must be movable.Duty cannot be levied on immovable property .Central excise duty cannot imposed on plant and machinery 2.Marketability Goods must be marketable .The goods must be known in the market and must be capable of being bought or sold
- 11. For the liability of duty of central excise to arise ,the item in question should not only be goods it should also be excisable goods .A goods become excisable if and only if it is mentioned in the Central Excise Tariff Act 1985
- 12. The third condition that must be satisfied for becoming liable to pay duties of central excise is that the goods must be manufactured or produced
- 13. Finally ,for the liability to pay central excise duty to arise the goods must be manufactured or produced in India
- 14. The central excise duty is a tax on manufacture or production of goods .Hence ,the liability to pay excise duty lies on manufacturer or the producer
- 15. The duty of central excise is charged on four bases: 1.Specific duty 2.Tariff duty 3.Maximum retail price 4.ad -valorem basis
- 16. It is the duty payable on the basis of some physical feature of the product unit like weight ,length ,volume,thickness, etc. Some of the goods on which duty is charged on the basis are as follows item Basis Cigarette Length Matches Box of 100 Sugar Quintal Cement Per tonne
- 17. The government has the power to declare a value on the basis of which duty of central excise will be charged .When the government declare the value ,the duty is charged on the value and the actual value of the goods is ignored
- 18. Some manufactures had started the practice of central excise by resorting to some questionable practices .In order to check these malpractices ,a new basis of valuation was introduced ,that is ,the maximum ratail price(MRP)-based valuation Eg:television sets,DVD players ,Cosmetics,Toilet preparations and chocolates
- 19. The first three bases of valuation are applied for only a few goods.In a large majority of cases the duty of central excise is payable on the basis of the value of the goods ,called the assessable value.
- 20. VINOD K RAJU MUSALIAR COLLEGE PATHANAMTHITTA