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CENTRAL EXCISE ACT,1944
Excise duty is a duty on production ormanufacture of goods.
In India excise duty is levied in accordancewith the provisions ofThe Central ExciseAct,1944.
Indian constitution has given power to central
govt. and state govt. to levy various taxes andto collect excise duty on the goodsmanufactured in India.
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CENTRAL EXCISE ACT,1944
This duty is based on the value of the goods
manufactured, which determine by applying the
RATES specified in the First Schedule and theSecond Schedule to the Central Excise Tariff
Act,1985.
The First Schedule gives the Basic Excise Duty(BED) rate and the Second Schedule gives the
Special Excise Duty (SED) rate.
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Basic Conditions of Excise Liability
There are four basic conditions for levy of
central excise duty.
i)The duty is on goods.ii)The goods must be excisable.
iii)The goods must be manufactured or
produced.iv)Such manufacture or production must be in
India.
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Classification of Goods
The central excise tariff act,1985 (CETA)
classifies all the goods under 96 chapters and
specific code is assigned to each item.
There are over 1000 tariff headings and 2000
sub-headings.
This classification forms basis for classifying
the goods under particular chapter head and
sub-head to prescribe duty.
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CETA contains two schedules:-
i)The first schedule gives basic excise duties
leviable on various products.ii)The second schedule gives list of items on
which special excise duty is payable.
Sections and chapters of CET
A:-i)CETA is divided in 20 sections.
ii)A section is a grouping of no.of chapters.
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Scheme of classification
Each section has various chapters.
A section related to a class of goods,
e.g.,section-I is Animal products, section-XIis Textile products.
A chapter contains goods of one class,
e.g.,section-XI ofTextile products has chapter
50 relating to silk, chapter 51 relating to wool
and chapter 52 relating to cotton.
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Each chapter is further divided into headings
and sub-headings,e.g.,chapter 50 of silk has 5
headings:
i)50.01 silk and cocoons,
ii)50.02 raw silk,
iii)50.03 silk waste,iv)50.04 silk yarn.
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MANUFACTURE
The term manufacture refers to a processinvolving the conversion of an input into acompletely different output.
As per sec.2(f) of the Central Excise Act,Manufacture includes any process:-
i) incidental or ancillary to the completion of
a manufactured product andii)which is specified in relation to any goods inthe section or chapter notes of the schedule
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MANUFACTURE
to the Central Excise Tariff Act,1985 asamounting to manufacture or
Which in relation to the goods specified in the
Third Schedule involves packing or repackingof such goods in a unit container or labelingor re-labeling of containers including thedeclaration or alteration of retail sale price onit or adoption of any other treatment on thegoods to render the product marketable tothe consumers.
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MANUFACTURE
Deemed manufacture:- Although a processdoes not amounting to manufacture but if anyactivity is specified in the Section or Chapter
Notes of the First Schedule to the CentralExcise Tariff Act,1985 it will be deemed to be amanufacture.
Packing, Re-packing and putting stickers ongoods.
Brand name owner is not the manufacturer.
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