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Central Excise Act 1944


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Central Excise Act 1944

  1. 1. CENTRAL EXCISE ACT 1944 by : DR. T.K. JAIN AFTERSCHO ☺ OL centre for social entrepreneurship sivakamu veterinary hospital road bikaner 334001 rajasthan, india mobile : 91+9414430763
  2. 2. What is excise ???? Tax paid at the time of manufacture of some goods as per the government rules.
  3. 3. Charging section – section 3 CENVAT (Central Value Added Tax) and additional duties As per Central Excise Tariff Act 1985 – schedule I and schedule II has to be paid by the manufacturer.
  4. 4. Valuation of goods... As per section 4 : value of the goods will be the value at which they will be sold, if they are not for sale, the value will be determined as per the prescribed procedure.
  5. 5. Remission of duty The government may remit duty as per section 5, if there is deficiency in quantity of goods due to some natural reasons...(example – loss in transit, spoilage in transit etc. )
  6. 6. What about excise free goods.. There are free trade zones, 100% export oriented companies, special economic zones, where there is exemption from excise (no excise) – however, when goods made in these areas are bround in rest of the country, for these – excise has to be paid.
  7. 7. Power to exempt from excise As per section 5A, the government can exempt some industries from excise, (however, this exemption will not be available to goods made in free trade zone and sold in rest of the country).
  8. 8. Offences and Penalties As per section 9, if there is any contravention of any provision of excise law, there shall be imprisonment for 3 years + fine and for 2 nd contravention, 7 years imprisonment + fine. These offenses are non-cognisable as per code of Criminal Procedure.
  9. 9. What are excisable goods? Those which are manufactured and for which mention is there is 1 st schedule or 2 nd schedule
  10. 10. What is factory? Section 2(e) : any premise including precincts thereof where any excisable goods other than salt is manufactured or where any manufacturing process is carried out.
  11. 11. What is curing? Sec. 2(c) : process of wilting, drying,fermenting or other such process which can make goods fit for marketing / sale / manufacturing.
  12. 12. Whosesale dealer A person who deals in excisable goods is called wholesale dealer.
  13. 13. Recovery As per sec. 11B, a person can claim recovery within 1 year from date of payment from Assistant Commissioner of central Excise ACCE will ensure that the company has not passed this burden to buyer while allowing recovery of duty. If there is delay in refund beyond 3 months, interest will be paid on that. (rate = 5% to 30%)
  14. 14. registration As per section 6, manufacturer and wholesale dealers in excisable goods have to get themselves registered.
  15. 15. Restriction on possession As per section 8, there is restriction on possession of excisable goods by any person beyond permission.
  16. 16. Consumer welfare fund The government will deposit money collected as per section 11B,11C,11D in consumer welfare fund. 11D : is with regard to collection of excise duty collected from buyer.
  17. 17. Price to indicate duty paid As per section 12A, seller will denote the excise duty paid in all documents like invoice etc. 12B says that it is assumed that excise duty is passed to the buyer.
  18. 18. Special audit As per section 14A, the Assistant commissioner of central excise Can ask for speical audit by cost accountant for ascertaining cost / price of goods manufactured.
  19. 19. Other provisions .... Sec. 11 : the government can recover excise due from any company / person Sec 9AA : in case of default by company, the government can presecute its executives Sec.11 AA & AB: if there is delay in payment of excise, interest @ 10 to 36 % may be charged. (after 3 months from date of determination) Sec. 11AC : Penalty in case of short levy of duty
  20. 20. What is the meaning of minimum wages? These are fixed by state governments with regard to industries and the employer has to pay at least this much of wages (generally @ per day). These are generally revised every two / five years based on recommendations of a wage board (different for different industry) for this purpose
  21. 21. What wages will not include? Wages will include only cash component, and not other facilities like house, etc.
  22. 22. Definition of wages Section 2(h) “Wages” means all remunerations capable of being expressed in terms of mon ey, which would, if the terms of the contract of employment, express of implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment and includes house rent allowance but doe s not include: 1. the value of: 1. any house accommodation, supply of light, water med 2. any other amenity or any service excluded by general or social order of the appropriate Government; 2. contribution by the employer to any Pension Fund or Provides Fund or under any scheme of social insurance3. any traveling allowance or the value of any traveling concession 4. any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment 5. any gratuity payable on discharge.
  23. 23. Wages in cash only.... The act says that wages should be in cash only and not in kind (in any goods). Wages include only cash payments – it does not include any facilities provided.
  24. 24. How is the rate fixed? The wages may be fixed on hourly basis, or on daily basis or on piece rate basis or on monthly basis. It differs from Industry to industry. Generally the government will fix the rate for all those industries where 1000 or more workers are working in the total state. A general minimum wages may be prescribed for general workers.
  25. 25. How to arrive at minimum wage? Look at the cost of living index, based on this wages are revised. Cost of living index denotes changes in the price level. It is based on a basket of commodities.
  26. 26. Who is employee? Section 2(i) Employee means any person who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical in a scheduled employment in respect of which minimum rates of wages have been fixed; and includes an outworker to whom any articles or materials are given out by another person to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale purpose of the trade or business of that other person where the process is to be carried out either in the home of the out-worker or in some other premises, net being premises under the control and management of that person
  27. 27. What is scheduled industry ? All the industries which are listed are called scheduled industries and they are covered in the minimum wages act.
  28. 28. Who is employer? Sec 2 (e) : 1. in a factory - , any person named under clause (f) of sub-section (1) of Section 7 of the Factories Act, as manager 2. in any scheduled employment under the control of any Government the person or authority appointed by such Government for the supervision and control of employees or where no person of authority is so appointed, the Head of the Department; 3. in any scheduled employment under any local authority - the Chief Executive Officer of the local authority; 4. in any other case- any person responsible to the owner of the supervision and control of the employees or for the payment of wages.
  29. 29. Method of fixing wages? 1. it may ask the committee / board, based on the advice of the board, it may fix the wage rate and specify in Gazettee. 2. it can ask people to give their proposal, which will be forwarded to the board / committee and based on the proposals, the wage rate will be fixed.
  30. 30. Case : Bijoy Cotton Mills V/s Ajmer The company had challenged this act stating that it was against freedom of trade (article 19 – 1- g), however, The court held that the act is constitutional.
  31. 31. Case : U. Unichoy v.s Kerala The court held being a welfare state, it is the responsibility of the government to prevent exploitation of workers, so the goverment should fix minimum wages.
  32. 32. Case : Kamani Metals vs workers Minimum wages have to be paid, whether the factory is in profit or loss. Even if the factory is in loss, you have to pay minimum wages.
  33. 33. Other provisions : Section 14 : pay overtime, if worker works more than prescribed hours (as per sec. 13, hours of work have to be fixed), and if the worker willingly works for less time, the wages may be reduced also (as per section 15). But it is obligatory to pay at least minimum wages (sec. 12).