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Central Excise is an indirect tax which is levied on goods manufactured in India. These good should be excisable i.e. only those goods excise duty is charged which comes under the regime Excise Duty. Central Excise forms the major source of revenue for the government. The taxable event under the Central Excise law is ‘manufacture’ and the liability of Central Excise duty arises as soon as the goods are manufactured and is unrelated to weather the goods are sold or not. Various types of excise duty are as follows :
Basic excise duty is termed as CENVAT. Basic duty is the specified rate at which excise duty charged on the manufactured goods. These rates are specified in First Schedule to Central Excise Tariff Act. In addition to the basic excise duty there are other two types of duties levied by the central government are :
It is a special duty charged on some of the goods such a pan masala, cars etc.
The additional duty is charged on the specified items i.e. the goods of special importance under the Additional Duties Act, 1957
It is a duty which is charged on the basis of specific unit like weight, volume, length, thickness, etc. For example in case of Sugar excise duty is payable on the basis of weight i.e. per kg basis and in case of Cigarette excise duty is payable on the basis of length.
It is aduty payable as % of Tariff Value which is fixed by the Government from time to time.
This duty is payable based on maximum retail price. Retail price is the maximum price at which the final goods in the packaged form that can be sold to the ultimate consumer. So in case of more than one retail price printed on the same package than the maximum of such retail price will be considered for excise.
It is duty payable as % based on the assessable value. This assessable value is derived on the basis of section 4 of Central Excise Act which deals with the valuation of excisable goods.
This is the basic act which provides for the charging of duty, calculations, powers of officers, penalty etc. It has been amended from time to time. So the rules covered in Central excise act 1944 have been simplified and amended which are now contained in following new rules:
It contains tariff schedules divided into 20 sections. The rates at which the goods specified in the schedule have to be charged are contained in this Act. Excisable goods have been classified under different categories like animal products, vegetable products, mineral products, chemical products, wood products, textile products, stone products, metal products, vehicles, arms and ammunitions.
The term goods is not defined by the central excise act the scope of the term is derived from definitions given by the constitution, customs act, the sale of goods act. The two most important elements derived from these definitions about the goods are that the goods should be movable and marketable.
Excisable goods are those goods which are specified in the schedule to the Central Excise Tariff act 1985 i.e. those goods which are being subject to the excise duty.
The word manufacture is not completely defined in the Act. The definition is inclusive but not exhaustive. Definition of manufacture in section 2(f) includes;