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Section 3 – The Central Excise Act, 1944

The Central Excise Act, 1944

 

 

3. Duties specified in the Schedule to the Central Excise Tariff Act, 1985 to be levied.—

 

(1) 1[There shall be levied and collected in such manner as may be prescribed,—

 

(a) 2[a duty of excise, to be called the Central Value Added Tax (CENVAT)] on all excisable goods 3[(excluding goods produced or manufactured in special economic zones)]* which are produced or manufactured in India as,] and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);

 

(b) a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods 3[(excluding goods produced or manufactured in special economic zones)]* specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which are produced or manufactured in India, as, and at the rates, set forth in the said Second Schedule:]

 

4[Provided that the duties of excise which shall be levied and collected on any 5[excisable goods which are produced or manufac­tured,—

6[***]

 

(ii) by a hundred per cent export oriented undertaking and 7[brought to any other place in India],

 

shall be an amount equal to] the aggregate of the duties of customs which would be leviable 8[under the Customs Act, 1962 (52 of 1962) or any other law for the time being in force] on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value, the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975 (51 of 1975).

 

9[Explanation 1.—Where in respect of any such like goods, any duty of customs leviable for the time being in force is leviable at different rates, then, such duty shall, for the purposes of this proviso, be deemed to be leviable at the highest of those rates.]

 

10[Explanation 2.—In this proviso,—

 

11[***]

 

11[***]

 

(ii) “hundred per cent export-oriented undertaking” means an undertaking which has been approved as a hundred per cent. ex­port-oriented undertaking by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951), and the rules made under that Act.]]

 

12[(iii) “Special Economic Zone” has the meaning assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005 (28 of
2005).]

 

13[(1A) The provisions of sub-section (1) shall apply in respect of all excisable goods other than salt which are produced or manufactured in India by, or on behalf of, Government, as they apply in respect of goods which are not produced or manufactured by Government.]

 

(2) The Central Government may, by notification in the Official Gazette, fix, for the purpose of levying the said duties, tariff values of any articles enumerated, either specifically or under general headings, in 14[the First Schedule and the Second Schedule] to the Central Excise Tariff Act, 1985 (5 of 1986)] as chargeable with duty ad valorem and may alter any tariff values for the time being in force.

 

15[(3) Different tariff values may be fixed—

 

(a) for different classes or descriptions of the same excisable goods; or

(b) for excisable goods of the same class or description—

 

(i) produced or manufactured by different classes of producers or manufacturers; or

 

(ii) sold to different classes of buyers:

 

Provided that in fixing different tariff values in respect of excisable
goods falling under sub-clause (i) or sub-clause (ii), regard shall be had
to the sale prices charged by the different classes of producers or manufacturers or, as the case may be, the normal practice of the wholesale trade in such
goods.]

 

COMMENTS

 

Excisable goods

Carbide (Lime) sludge arising in manufacture of acetylene gas – Is not an excisable item particularly when it was not established to be a marketable commodity; Collector of Central Excise, Bolpur v. Ellenbarrie Industrial Gases Ltd., 2003 (151) ELT 25 (SC).

 

To attract excise duty under section 3 of the Central Excise Act the article must satisfy the twin attributes of excisable goods – Mobility and Marketability – Or it should find a place by that name in the Schedule to the Act; Commissioner of Central Excise, Mumbai v. Josts Engineering Co. Ltd., 2002 (146) ELT 29 (SC).

 

It is now well settled that the burden to establish that certain products are liable to excise duty is on the department and in the absence of any finding by the authorities that the process adopted by the petitioners amounts to manufacture, the order to levying excise duty deserves to be quashed; Sohanlal & Brothers v. Union of India, (1990) 46 ELT 211 (Bom).

 

The ownership of goods is not a relevant consideration for the levy of the excise duty. Assessable value of manufactured products includes the cost of free supplies; Texmaco Ltd. v. Collector of Central Excise, Calcutta, AIR 1992 SC 1801.

 

The expression “duty of excise” is limited in its connota­tion only to basic duty of excise levied under the Act or it also covers special duty of excise levied under various Finance Bills and Acts, additional duty of excise levied under the Additional Duty of Excise (Goods of Special Importance) Act, 1957 and any other kind of duty of excise levied under a Central enactment; Union of India v. Modi Rubber Limited, (1986) 3 SCJ 447

.

16[***]

 

———-

 

1. Subs. by Act 27 of 1999, sec. 121, for certain words (w.e.f. 11-5-1999).

 

2. Subs. by Act 10 of 2000, sec. 92, for “a duty of excise” (w.e.f. 12-5-2000).

 

3. Ins. by Act 20 of 2002, sec. 133 (w.e.f. 11-5-2002).

* This shall be effective from such date appointed by the Central Government by Notification in the Official Gazette.

 

4. Ins. by Act 14 of 1982, sec. 46 (w.e.f. 11-5-1982).

 

4. Subs. by Act 21 of 1984, sec. 45, for certain words (w.e.f. 11-5-1984).

6. Clause (i) omitted by Act 22 of 2007, sec. 115(i) (w.e.f. 11-5-2007). Earlier clause (i) was amended by Act 14 of 2001, sec. 120 (w.e.f. 11-5-2001) and by Act 20 of 2002, sec. 133(ii)(a) (w.e.f. 11-5-2002). Clause (i), before omission by Act 22 of 2007, stood as under:

 

“(i) in a free trade zone or a special economic zone and brought to any other place in India; or”.

 

7. Subs. by Act 14 of 2001, sec. 120, for “allowed to be sold in India” (w.e.f. 11-5-2001).

 

8. Subs. by Act 10 of 2000, sec. 92, for “under section 12 of the Customs Act, (52 of 1962)” (w.r.e.f. 11-5-1982).

 

9. Subs. by Act 10 of 2000, sec. 92, for Explanation 1 (w.r.e.f. 11-5-1982).

 

10. Subs. by Act 21 of 1984, sec. 45, for Explanation 2 (w.e.f. 11-5-1984).

 

11. Clause (i) omitted by Act 22 of 2007, sec. 115(ii)(a) (w.e.f. 11-5-2007). Earlier clause (i) was substituted by Act 20 of 2002, sec. 133(ii)(b) (w.e.f. 11-5-2002). Clause (i), before omission by Act 22 of 2007, stood as under:

 

“(i) “free trade zone” means a zone which the Central Government may, by notification in the Official Gazette, specify in this behalf;”.

 

12. Subs. by Act 22 of 2007, sec. 115(ii)(b), for clause (iii) (w.e.f. 11-5-2007). Earlier clause (iii) was inserted by Act 14 of 2001, sec. 120 (w.e.f. 11-5-2001). Clause (iii), before substitution by Act 22 of 2007, stood as under:

 

“(iii) “special economic zone” means a zone which the Central Government may, by notification in the Official Gazette, specify in this behalf.”.

 

13. Subs. by Act 30 of 1963, sec. 3, for sub-section (1A) (w.e.f. 1-10-1963). Earlier sub-section (1A) was inserted by Act 45 of 1951, sec. 6 (w.e.f. 27-8-1951).

 

14. Subs. by Act 27 of 1999, sec. 119, for “the Schedule” (w.e.f. 11-5-1999). Earlier they were substituted by Act 5 of 1986, sec. 4, for “the First Schedule” (w.e.f. 28-2-1986).

 

15. Subs. by Act 25 of 1978, sec. 19, for sub-section (3) (w.e.f. 1-7-1978).

 

16. Section 3A omitted by Act 14 of 2001, sec. 121 (w.e.f. 11-5-2001). Earlier section 3A was inserted by Act 81 of 1956, sec. 2 (w.e.f. 22-12-1956) and was repealed by Act 58 of 1960,

sec. 2 and Sch. I (w.e.f. 26-12-1960) and again inserted by Act 26 of 1997, sec. 81 (w.e.f. 14-5-1997).

 

 

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The Central Excise Act, 1944

 

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