Central Excise duty is an indirect tax which is levied and collected on the goods/commodities manufactured in India. Generally, manufacturer of commodities is responsible to pay duty to the Government. This indirect taxation is administered through an enactment of the Central Government viz., The Central Excise Act, 1944 and other connected rules- which provide for levy, collection and connected procedures. It is compulsory to pay Central Excise duty payable on the manufactured goods. It is not payable on the exported goods out of India.
In 2001, new Central Excise (No.2) Rules, 2001 have replaced the Central Excise Rules, 1944 with effect from 1st July, 2001. Other rules have also been notified namely, CENVAT Credit Rules, 2001, Central Excise Appeal Rules, 2001etc. With the introduction of the new rules several changes have been effected in the procedures. The new procedures are simplified. There are less numbers of rules, only 32 as compared to 234 earlier.
Types of Central Excise
Duties under Central Excise Act - Basic duty and special duty of excise are levied under Central Excise Act. Basic excise duty 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.
National Calamity Contingent Duty - A ‘National Calamity Continent Duty’ has been imposed on cigarettes, biris, pan masala and miscellaneous tobacco products w.e.f. 1-3-2001.
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.
Additional Duty on Textile Articles - Additional excise duty of 15% on certain textile and textile articles like articles of silk / wool / cotton, man-made filaments, metalised yarn etc. is imposed under Additional Duties of Excise (Textile and Textile Articles Act, 1978.)
Duty on Medical and Toilet Preparations - A duty of excise is imposed on medical preparations under Medical and Toilet Preparations (Excise Duties) Act, 1955.
Additional duty on Mineral Products - Additional duty on mineral products (like motor spirit, kerosene, diesel and furnace oil) is payable under Mineral Products (Additional Duties of Excise and Customs) Act, 1958.
Central Excise 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.
Every manufacturer of excisable goods (including Central/State Government undertakings or undertakings owned or controlled by autonomous corporations) on which excise duty is livable.
Persons holding private warehouses.
Persons who obtain excisable goods for availing end-use based exemption notification.
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:
Interlinked process – product manufactured/produced in one premise are substantially used in other premises for manufacture of final products.
Large number of raw materials are common and received/proposed to be received commonly for both/all the premises
Separate Registration is required for each depot, godown etc. in respect of persons issuing Cenvat invoices. However, in the case liquid and gaseous products, availability of godown should not be insisted upon.
Registration Certificate may be granted to minors provided they have legal guardians i.e. natural guardians or guardians appointed by the Court, as the case may be, to conduct business on their behalf.
Conditions for Excise Liabilities
The duty is on goods.
The goods must be excisable.
The goods must be manufactured or produced.
Such manufacture or production must be in India. Unless all of these conditions are satisfied, Central Excise Duty cannot be levied.
In 2001, new Central Excise (No.2) Rules, 2001 have replaced the Central Excise Rules, 1944 with effect from 1st July, 2001. Other rules have also been notified namely, CENVAT Credit Rules, 2001, Central Excise Appeal Rules, 2001etc. With the introduction of the new rules several changes have been effected in the procedures. The new procedures are simplified. There are less numbers of rules, only 32 as compared to 234 earlier.
Types of Central Excise
Duties under Central Excise Act - Basic duty and special duty of excise are levied under Central Excise Act. Basic excise duty 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.
National Calamity Contingent Duty - A ‘National Calamity Continent Duty’ has been imposed on cigarettes, biris, pan masala and miscellaneous tobacco products w.e.f. 1-3-2001.
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.
Additional Duty on Textile Articles - Additional excise duty of 15% on certain textile and textile articles like articles of silk / wool / cotton, man-made filaments, metalised yarn etc. is imposed under Additional Duties of Excise (Textile and Textile Articles Act, 1978.)
Duty on Medical and Toilet Preparations - A duty of excise is imposed on medical preparations under Medical and Toilet Preparations (Excise Duties) Act, 1955.
Additional duty on Mineral Products - Additional duty on mineral products (like motor spirit, kerosene, diesel and furnace oil) is payable under Mineral Products (Additional Duties of Excise and Customs) Act, 1958.
Central Excise 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.
Every manufacturer of excisable goods (including Central/State Government undertakings or undertakings owned or controlled by autonomous corporations) on which excise duty is livable.
Persons holding private warehouses.
Persons who obtain excisable goods for availing end-use based exemption notification.
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:
Interlinked process – product manufactured/produced in one premise are substantially used in other premises for manufacture of final products.
Large number of raw materials are common and received/proposed to be received commonly for both/all the premises
Separate Registration is required for each depot, godown etc. in respect of persons issuing Cenvat invoices. However, in the case liquid and gaseous products, availability of godown should not be insisted upon.
Registration Certificate may be granted to minors provided they have legal guardians i.e. natural guardians or guardians appointed by the Court, as the case may be, to conduct business on their behalf.
Conditions for Excise Liabilities
The duty is on goods.
The goods must be excisable.
The goods must be manufactured or produced.
Such manufacture or production must be in India. Unless all of these conditions are satisfied, Central Excise Duty cannot be levied.
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