Levy, Collection & Exemption from Excise Duty
Taxable Event :
Excise duty is leviable on all excisable goods, which are produced or manufactured in India. Thus, manufacture or production in India’ of an excisable goods is a ‘taxable event’ for Central Excise. It becomes immaterial that duty is levied and collected at a later stage i.e. at the time of removal of goods. Therefore, removal from factory is not the ‘taxable event’.
Person Liable to Pay excise duty :
The following persons shall be liable to pay excise duty :
(i) A person, who produces or manufactures any excisable goods,
(ii) A person, who stores excisable goods in a warehouse,
(iii) In case of molasses, the person who procures such molasses,
(iv) In case goods are produced or manufactured on job work,
(a) the person on whose account goods are produced or manufactured by the job work, or
(b) the job worker, where such person authorizes the job worker to pay the duty leviable on such
Liability to Excise Duty :
Section3(1) provides that there shall be levied and collected in such manner, as may be prescribed :
(a) a duty of excise to be called the Central Value Added Tax (CENVAT), on all excisable goods which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985;
(b) a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods specified in the Second Schedule to the Central Excise Tariff Act, 1985, which are produced or manufactured in India, as, and at the rates, set forth in the said Second Schedule :
Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured :
(i) in a free trade zone or a special economic zone and brought to any other place in India; or
(ii) by a hundred per cent export-oriented undertaking and brought to any other place in India,
shall be an amount equal to the aggregate of the duties of customs which would be leviable under the Customs Act, 1962 or any other law for the time being in force on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value.
Collection of Excise Duty :
For collection of Central Excise duty the following two procedure are followed by the Central Excise Department :
(i) Physical Control Procedure: Applicable to cigarettes only. In this case, the assessment precedes clearance, which takes place under the supervision of Central Excise officers;
(ii) Self-Removal Procedure: Applicable to all other goods produced or manufactured within the country.Under this system, the assesee himself determines the duty liability on the goods and clears the goods.
Exemptions from Levy of Excise Duty :
Section A of the Central Act, 1944 empowers the Central Government to grant Exemption form lay of excise duty and lays down the provisions relating thereto :
(1) Power to Notify Exemptions in Public Interest
Section 5A(1) provides that the Central Government is empowered to exempt in the public interest, any excisable goods from the levy of whole or any part of excise duty. Such exemption may be granted either absolutely or subject to such conditions, as may be specified in the Notification.
Exceptions —However, unless specifically provided in such notification, no exemption shall apply to excisable goods, which are produced or manufactured :
(i) in a free trade zone or special economic zone and brought to any other place in India; or
(ii) by a hundred per cent export-oriented undertaking and brought to any place in India.
(2) Exemption in public interest
Section 5A(2) provides that if the Central Government is satisfied that it is necessary in the public
interest so to do, it may, by special order in each case, exempt from payment of duty of excise, under circumstances of an exceptional nature to be stated in such order, any excisable goods on which duty of excise is leviable.
(3) Notification may provide for different method of levy of duty as well
Section 55A(3) provides that an exemption in respect of any excisable goods from any part of the duty of excise leviable thereon may be granted by providing for the levy of a duty on such goods at a rate expressed in a form or method different from the form or method in which the statutory duty is leviable and any exemption granted in relation to any excisable goods in the manner provided in this subsection shall have effect subject to the condition that the duty of excise chargeable on such goods shall in no case exceed the duty statutorily payable.
Section 5A(2A) provides that the Central Government may, if it considers it necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued or order issued, insert an Explanation in such notification or order, as the case may be, by notification in the Official Gazette at any time within one year of issue of the notification or order, and every such Explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be.