Central Excise Act

Central Excise is a duty on excisable goods manufactured or produced in India, other than alcoholic liquor.

Central excise duty liability is principally on ‘manufacturer’, except in a few cases. In the majority of cases, duty rate w.e.f. 24.2.09 is 10% plus education cess of 2% and Secondary and Higher Education Cess of 1%. Thus, generally, duty is 12.36%.
There are some exclusions, partial or full exemptions and higher duties in some cases. As per Appendix IV of CETA, the rate of additional duty on Goods of special Importance is 8% in the majority of the cases. (Section 3(1) of The Additional Duties of Excise (Goods of Special Importance) Act, 1957.

We will be discussing the below topics under the Central Excise Act, 1944

Excisable Goods under Central Excise Act

Classification of Goods under Central Excise Act

Harmonised system of nomenclature

Central Excise Tariff Act Interpretation rules

Valuation of Goods under the Central Excise Act

MRP based valuation

Valuation in case of Job work – Rule 10A

Excisable Goods under Central Excise Act

Laws Relating to Central Excise

Manufacture under the Central Excise Act

Manufacturer under the Central Excise Act

Levy, Collection & Exemption from Excise Duty

Excise on small scale industries

Other procedure in Central Excise

Excise on small scale industries

Export benefits and procedures

Assessment under Central Excise Law

Refund and other important Provisions

Demands and Penalties


The power of Taxation under Constitution of India is as follows:

(a) The Central Government gets tax revenue from Income-tax (except on Agricultural Income), Excise (except on alcoholic drinks) and Customs.

(b) The State Governments get tax revenue from sales tax, excise from liquor and alcoholic drinks, tax on agricultural income.

(c) The Local Self Governments e.g. municipalities, etc. get tax revenue from entry tax and house
property tax. Article 265 provides that no tax shall be levied or collected except by authority of Law. The authority for levy of various taxes, as discussed above, has been provided for under Article 246 and the subject matters enumerated under the three lists set out in the Schedule-VII to the Constitution.

List I: Union List

Item No. 82 Tax on income other than agricultural income
Item No. 83 Duties of customs including export duties
Item No. 84 Duties of excise on tobacco and other goods manufactured or produced in India except alcoholic liquors for human consumption, opium narcotics, but including medical and toilet preparations containing alcohol, opium or narcotics
Item No. 85 Corporation Tax
Item No. 92A Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of interstate trade or commerce.
Item No. 92B Taxes on consignment of goods, where such consignment takes place during interstate trade or commerce.
Item No. 92C Taxation of Services
Item No. 97 Any other matter not included in the List II, List III and any tax not mentioned in List II or List III

List-II i.e. the State List

In respect of which the State Government has exclusive powers to levy taxes, are as follows:

Item No. 46 Taxes on agricultural income
Item No. 51 Excise duty on alcoholic liquors, opium and narcotics
Item No. 52 Tax on entry of goods into a local area for consumption, use or sale therein (usually called as Octroi)
Item No. 54 Tax on sale and purchase of goods other than newspapers except tax on interstate sale or purchase

List-III : Concurrent List — List III of Seventh Schedule, called “concurrent list”, includes matters where both Central Government and State Government can make laws.