INTRODUCTION - Central Excise Practice Manual (OLD) - Central Excise

PART-I: AN OVERVIEW OF THE CENTRAL EXCISE LAW AND PROCEDURES 1. INTRODUCTION 1.1 Authority for the taxation: Central Excise duties are levied on the goods manufactured in India. Article 246 read with the Entry at Sl.No. 84 of List 1 under the VII Schedule of Constitution of India empowers the Union Government to levy the Central Excise duty. Central Excise duty is levied on the goods (except alcohol, alcoholic preparations and narcotic substances like opium) manufactured or produced in terms of Section 3 of the Central Excise Act, 1944 . The duty is, however, liable to be paid only at the time of removal from the factory in the manner prescribed under Rule 8. However, where Molasses are produced in a Khandsari Sugar factory, the person who procures such molasses shall pay the duty leviable on such molasses as if such molasses have been produced by the procurer. The rates of Central Excise duty are specified in the Schedule to the Central Excise Tariff Act, 1985. 1.2 Manufacture: Central Excise duty is levied when a new article comes into existence as a result of the manufacturing activity. The expression 'manufacture' has been defined under Section 2(f) of the Act, the essence of which is as follows: 'Manufacture' includes- = any process incidental or ancillary to the completion of a manufactured product; = any process, which is specified in relation to any goods in the Section or Chapter Notes of the Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture; or = any process, which, in relation to the goods specified in the Third Schedule to the Central Excise Tariff Act, 1985 involving any of the following activities: packing or repacking of such goods in a unit container or labelling or relabelling of containers (including the declaration or alteration of retail sale price on it) or adoption of any other treatment on the goods to render the product marketable to the consumer.