Tuesday, 24 December 2019

Unit 3: Classification and Valuation of Excisable Goods

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Unit 3: Classification and Valuation of Excisable 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.

The excise duty is chargeable at different goods at different rates.

Trade Parlance Theory emerged out of case of Grenfell vs.

IRC (1876), where Justice Pollok concluded that nay word in statue should be interpreted (understood in its popular sense, in which people understand it.

The Central Excise Tariff Act was amended in 2004.

HSN system define as excisable goods list in India and goods are classified systematically following the footsteps of HSN.

The CE Act 1944 does not provide any guidelines for classification of goods.

Duty at ad valorem rates is charged on a wide range of excisable commodities.

Valuation of such goods is governed by section 4 of the Central Excise Act, 1944, read with the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.

In some cases, tariff value is fixed by Government from time to time.

This is a “Notional Value” for purpose of calculating the duty payable.


CETA: CETA and Customs Act both have sections and chapters.

Remember you have read above that the scheme of class is common for both CETA and Customs Act.

HSN (Harmonised System of Nomenclature): HSN system defines as excisable goods list in India and goods are classified systematically following the footsteps of HSN (Harmonised System of Nomenclature) as in Customs Tariff.

Specific Duty: It is the duty payable on the basis of certain unit like weight, length, volume, thickness etc.

Tariff value: In some cases, tariff value is fixed by Government from time to time.

This is a “Notional Value” for purpose of calculating the duty payable.

Value based on Retail Sale Price: Section 4A of CEA (inserted w.e.f.1997) empowers Central Government to specify goods on which duty will be payable based on ‘retail sale price’    

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