This document discusses the laws related to central excise duty in India. It outlines the Central Excise Act of 1994, Central Excise Tariff Act of 1985, and Central Excise Rules of 1944 as the basic laws governing the levy and collection of central excise duties. It also describes the conditions for goods to be subject to central excise duty, which are that the goods must be movable, marketable, excisable as defined in the Tariff Act, and manufactured/produced in India. Finally, it discusses the different bases for valuation of excise duty, including specific duty, tariff duty, maximum retail price, and ad valorem basis, with ad valorem being the most common

1. BY
VINOD K RAJU
MUSALIAR COLLEGE
PATHANAMTHITTA

2.  1.Central Excise Act 1994
 2.Central Excise tariff Act 1985
 3.Central Excise Rules ,1944

3.  This is the basic law related to the levy and
collection of duties of central excise .However
this Act does not contain the rate at which
duties are imposed

4.  This Act classifies various goods on which
central excise duties are levied and prescribes
the rates at which the duty is payable

5.  All manufacturers of excisable goods are
required to register under these rules .The
registration is valid as long as production
activity continues and no renewals are
necessary

6. 1.Basic duty of central excise
This duty is levied at the rates specified
in the First schedule to Central Excise Tariff
Act 1985
2. Specific duty of excise
Some commodities like pan masala and
cars have special excise duties levied on them
.These items are covered under in schedule II
to the Central Excise Tariff

7. 4.Excise duty on clearances by 100 % EOUs
100 per cent Export –oriented Units are
expected to export all their production .However ,if
they clear their final product in the domestic tariff
area,the rate of excise duty will be equal to that of
the customs duty on like article imported in India

8.  Taxable event for charge of duty of central excise
is the manufacturer or production of goods in
India
In this context ,the Supreme Court has
observed :
Excise duty is not directly on the goods ,but
manufactured thereof. Though both excise duty
and sales duty levied with reference to goods ,the
two are very different imposts.In one case ,the
imposition is on the act of manufactured or
production ,while in the other it is on the act of
sale.

9. For condition must be present for the charge
of central excise duty:
1.The duty is on goods
2.The goods must be excisable
3 .The goods must be manufactured or
produced
4.Such manufacture or production must be
take place in India

10. For an item to be considered goods for the
purpose of the levy of central excise duty ,it
must satisfy two requirements:
1.Movability
Goods must be movable.Duty cannot be
levied on immovable property .Central excise
duty cannot imposed on plant and machinery
2.Marketability
Goods must be marketable .The goods
must be known in the market and must be
capable of being bought or sold

11. For the liability of duty of central excise to
arise ,the item in question should not only be
goods it should also be excisable goods .A
goods become excisable if and only if it is
mentioned in the Central Excise Tariff Act
1985

12. The third condition that must be satisfied
for becoming liable to pay duties of central
excise is that the goods must be
manufactured or produced

13. Finally ,for the liability to pay central
excise duty to arise the goods must be
manufactured or produced in India

14. 
The central excise duty is a tax on
manufacture or production of goods .Hence
,the liability to pay excise duty lies on
manufacturer or the producer

15. The duty of central excise is charged on
four bases:
 1.Specific duty
 2.Tariff duty
 3.Maximum retail price
 4.ad -valorem basis

16.  It is the duty payable on the basis of some
physical feature of the product unit like
weight ,length ,volume,thickness, etc.
 Some of the goods on which duty is charged
on the basis are as follows
item Basis
Cigarette Length
Matches Box of 100
Sugar Quintal
Cement Per tonne

17. The government has the power to declare
a value on the basis of which duty of central
excise will be charged .When the government
declare the value ,the duty is charged on the
value and the actual value of the goods is
ignored

18. Some manufactures had started the practice of
central excise by resorting to some
questionable practices .In order to check
these malpractices ,a new basis of valuation
was introduced ,that is ,the maximum ratail
price(MRP)-based valuation
Eg:television sets,DVD players
,Cosmetics,Toilet preparations and
chocolates

19. The first three bases of valuation are applied
for only a few goods.In a large majority of
cases the duty of central excise is payable on
the basis of the value of the goods ,called the
assessable value.

20. VINOD K RAJU
MUSALIAR COLLEGE
PATHANAMTHITTA