Page 26 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Unit 2: Central Excise Duty

Deemed Manufacture: Deemed manufacture is of two types: Notes
(i) CETA specifies some processes as 'amounting to manufacture'. If any of these processes
are carried out, goods will be said to be manufactured, even if as per Court decisions, the
process may not amount to 'manufacture' [Section 2(f) (ii)].

(ii) In respect of goods specified in third schedule of Central Excise Act, repacking, relabelling,
putting or altering retail sale price etc. will be 'manufacture'. The goods included in Third
Schedule of Central Excise Act are same as those on which excise duty is payable u/s 4A on
basis of MRP printed on the package. [Section 2(f) (iii)].
Production: Production has also not been defined in CEA but production is used to cover items
like coffee, tea, tobacco, etc. which are called to have been manufactured nut produced.
Assembly: Assembly of various parts and components amount to manufacture provided it result
in movable goods which have distinctive identity, use, character, name etc. e.g., assembly of
computer is manufacture.

Notes Goods have not been defined in Central Excise Act. As per Article 366(12) of
Constitution of India, Goods includes all material commodities and articles.

2.1.4 Manufacturer

Manufacturer is a person who actually manufactures or produces the excisable goods. A person
who gets the production of other and sell it after putting its own brand then he will not be called
manufacturer, e.g., if Khaitan company gets the fans made from some person and sell it after
putting their brand name, the Khaitan company will not be manufacturer. The person actually
making the fans will be called manufacturer.

Self Assessment

Fill in the blanks:

1. ......................................Excise Law is levied on manufacturer or production of goods.
2. The ...................................... of paying the central excise is on the manufacturer.
3. Manufacturer is a person who actually manufactures or produces the ......................................
goods.
4. A duty of excise is imposed on ...................................... preparations under Medical and
Toilet Preparations.
5. Additional ...................................... Duty commonly known as countervailing Duty

2.2 Excise Ability and Manufacture

The tax imposed by the government on the manufacturer or producer on the production of some
items is called excise duty. The liability to pay excise duty is always on the manufacturer or
producer of goods. The duty being a duty on manufacture of goods, it is normally added to the
cost of goods, and is collected by the manufacturer from the buyer of goods. Therefore it is called

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