Page 28 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Unit 2: Central Excise Duty

Notes

Exemption from Payment of Excise Duty: Central Excise Rules grant exemption from duty if
goods are exported under bond, except exports to Nepal and Bhutan. Similarly, goods
manufactured in Special Economic Zones (SEZ) are not excisable and hence no excise duty can be
levied on goods manufactured in SEZ.

Generally 16% excise duty and 2% cess on it are imposed on most goods, but government can fix
different tariff values for different classes of goods or goods manufactured by different classes
or sold to different classes of buyers. Few exceptions like the following are there in case of
Textile sector.

Did u know? In case of Non-SSI (Small Scale Industries) i.e., normal assesses the excise duty
is payable monthly, and for SSI (availing exemption based on turnover) it is payable
quarterly.

Self Assessment

State whether True or False:

6. The tax imposed by the government on the manufacturer or producer on the production of
some items is called excise duty.

7. The liability to pay excise duty is always on the manufacturer or producer of goods.

8. Central Excise Rules grant exemption from duty if goods are exported under bond, except
exports to Malyasia and Bhutan.

9. The duty on the goods removed from the factory or the warehouse during the month shall
be paid by the 5th of the following month in case of Non-SSI and by 19th for SSI.

10. The production of sugar is an indirect tax because the manufacturers of sugar include the
excise duty in the price and pass it on to buyers.

2.3 Procedure for Central Excise Registration and grant of
Registration Certificate

Introduction: For the administration of the Central Excise Act, 1944 and the Central Excise
Rules, 2002 (hereinafter referred to as the 'said Rules') manufacturers' of excisable goods or any
person who deals with excisable goods with some exceptions, are required to get the premises
registered with the Central Excise Department before commencing business.
Legal Provisions: As per Section 6 of the Central Excise Act, 1944- any prescribed person who is
engaged in-

(a) The production or manufacture or any process of production or manufacture of any specified
goods included in the First Schedule and the Second Schedule to the Central Excise Tariff
Act, 1985 (5 of 1986) or

LOVELY PROFESSIONAL UNIVERSITY 23