Monday, 23 December 2019

Unit 2: Central Excise Duty

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Unit 2: Central Excise Duty


Central Excise duty is an indirect tax which is levied and collected on the goods/ commodities manufactured in India.

The Central Excise Act, 1944 and other connected rules- which provide for levy, collection and connected procedures.

Central Excise Law is levied on manufacturer or production of goods.

Movable means goods, which can be shifted from one place to another place, e.g., motor car, mobile phone, computer etc.

In respect of goods specified in third schedule of Central Excise Act, repacking, relabelling, putting or altering retail sale price etc.will be ‘manufacture’.

In case of delayed payment, interest should also be deposited at the rate of 13% p.m.

Generally 16% excise duty and 2% cess on it are imposed on most goods, but government can fix different tariff values for different classes of goods or goods manufactured by different classes or sold to different classes of buyers.


Assembly: Assembly of various parts and components amount to manufacture provided it result in movable goods which have distinctive identity, use, character, name etc.e.g., assembly of computer is manufacture.

Basic Excise Duty (BED): This is the duty 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.

CETA: It specifies some processes as ‘amounting to manufacture’.

If any of these processes are carried out, goods will be said to be manufactured, even if as per Court decisions, the process may not amount to ‘manufacture’.

National Calamity Contingent Duty (NCCD): A ‘National Calamity Continent Duty’ has been imposed on cigarettes, biris, pan masala and miscellaneous tobacco products w.e.f.

Production: Production has also not been defined in CEA but production is used to cover items like coffee, tea, tobacco, etc.which are called to have been manufactured nut produced.

Special Excise Duty (SED): As per the Section 37 of the Finance Act, 1978 Special Excise Duty was attracted on all excisable goods on which there is a levy of Basic Excise Duty under the Central Excises and Salt Act, 1944.


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