Section 3A - Power of Central Government to charge excise duty on the basis of capacity of production in respect of notified goods - Central Excise Act, 1944

1 [Power of Central Government to charge excise duty on the basis of capacity of production in respect of notified goods. ''3A. (1) Notwithstanding anything contained in section 3, where the Central Government, having regard to the nature of the process of manufacture or production of excisable goods of any specified description, the extent of evasion of duty in regard to such goods or such other factors as may be relevant, is of the opinion that it is necessary to safeguard the interest of revenue, specify, by notification in the Official Gazette, such goods as notified goods and there shall be levied and collected duty of excise on such goods in accordance with the provisions of this section. (2) Where a notification is issued under sub-section (1), the Central Government may, by rules,- (a) provide the manner for determination of the annual capacity of production of the factory, in which such goods are produced, by an officer not below the rank of Assistant Commissioner of Central Excise and such annual capacity shall be deemed to be the annual production of such goods by such factory; or (b) (i) specify the factor relevant to the production of such goods and the quantity that is deemed to be produced by use of a unit of such factor; and (ii) provide for the determination of the annual capacity of production of the factory in which such goods are produced on the basis of such factor by an officer not below the rank of Assistant Commissioner of Central Excise and such annual capacity of production shall be deemed to be the annual production of such goods by such factory: Provided that where a factory producing notified goods is in operation during a part of the year only, the annual production thereof shall be calculated on proportionate basis of the annual capacity of production: Provided further that in a case where the factor relevant to the production is altered or modified at any time during the year, the annual production shall be re-determined on a proportionate basis having regard to such alteration or modification. (3) The duty of excise on notified goods shall be levied, at such rate, on the unit of production or, as the case may be, on such factor relevant to the production, as the Central Government may, by notification in the Official Gazette, specify, and collected in such manner as may be prescribed: Provided that where a factory producing notified goods did not produce the notified goods during any continuous period of fifteen days or more, the duty calculated on a proportionate basis shall be abated in respect of such period if the manufacturer of such goods fulfils such conditions as may be prescribed. (4) The provisions of this section shall not apply to goods produced or manufactured, by a hundred per cent. export-oriented undertaking and brought to any other place in India. Explanation 1.- For the removal of doubts, it is hereby clarified that for the purposes of section 3 of the Customs Tariff Act, 1975, (51 of 1975) the duty of excise leviable on the notified goods shall be deemed to be the duty of excise leviable on such goods under the 3 [ Fourth Schedule ] read with any notification for the time being in force. Explanation 2.- For the purposes of this section, the expression hundred per cent. export-oriented undertaking shall have the meaning assigned to it in section 3. ] 2 [Explanation 3. -- For the purposes of sub-sections (2) and (3), the word factor includes factors . ] **************************** Notes: 1. Inserted by Finance Act, 2008, w.e.f. 10.5.2008. 2. Inserted vide THE FINANCE ACT, 2015 w.e.f. 14th May 2015 3. Substituted vide THE TAXATION LAWS (AMENDMENT) Act, 2017 w.e.f. 1st day of July, 2017 before it was read as, First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986.)