Central Excise

Central Excise is a levy on manufacture of goods. The event attracting levy of central
excise is manufacture of goods though excise duty is payable on removal of goods from
the place of manufacture. The removal of goods from the place of manufacture may or
may not be a sale. Central Excise duty is required to be paid even if goods are removed
from the place of manufacture for free distribution, or personal consumption or
consumption in other unit of the same manufacturer.

The Central Excise Act, 1944 contains the provisions about the levy, collection, &
assessment, of duty, Valuation of goods for the purpose of charging of duty, powers &
duties of Central Excise officers, Advance Rulings, Settlement of cases, Appeals &
adjudication of confiscations & penalties.

Section 37 of The Central Excise Act, 1944 empowers the Central Government to issue
Rules for procedures to be adopted by Central Excise officers for levy & Collection of
duty & procedures to be followed by manufactures for production, storage & removal of
goods , valuation of goods, availing the benefit of cenvat credit & payment of duty.

In exercise of powers granted by the 37 of The Central Excise Act, 1944 Government has
issued following Rules, the knowledge of which is as much important if not more than
The Central Excise Act, 1944 :-

1) Central Excise Rules, 2002

2) Cenvat Credit Rules, 2002
3) Central Excise (Settlement of cases) Rules, 2001
4) Central Excise ( Removal of goods at Concessional Rate of Duty for Manufacture of
Excisable Goods) Rules, 2001
5) Central Excise Valuation ( Determination of Price of Excisable Goods) Rules, 2000
6) Consumer Welfare Fund Rules, 1992
7) Customs & Central Excise Duties Drawback Rules, 1995

Central Government also issues notification from time to time to amend the Central
Excise Rules, to effect any change in rate of duty, exemption from payment of duty
subject to conditions as it may find fit to impose.

The Central Excise Tariff Act, 1985 contains rate of duty applicable in respect of
particular product. It has 96 chapters which are classified according to various categories
of goods.

There are about 75 general exemption notifications issued by Central Government which
gives full or partial exemption from payment of duty subject to condition imposed in the
notification.
Apart from this there are various trade notices, ministerial circular, departmental
circulars, notices issued by various comisionerates clarifying the provisions of central
excise contained in Act, Rules & notifications.

A Chartered Accountant can provide service to a manufacturer in various ways as

explained below:-

1) Determining the applicability of levy of excise duty in respect of a particular

product.
2) Once it is established that the product attracts levy of excise duty than finding out
proper classification of product as per Central Excise Tariff determining the rate
of duty.
3) Applicability of a exemption notification in respect of the product & advising him
on tax planning to minimize the payment of duty once it is determined that a
particular exemption notification is applicable.
4) Advising the client about the procedures required to be observed regarding
production, storage, removal, payment of duty, filing of monthly returns &
assessment of duty.
5) Internal audit of excise records with a view to ensure compliance of excise
procedures as well as ensuring that there is no lapse in availing cenvat credit.
6) Advising about the export benefits & helping them to choose the right option of
several export benefit available to the exporter.
7) Advising the client about location advantage in respect of payment of excise duty
in respect of certain products.
8) Drafting reply to show cause notice received from Department of Central Excise.
9) Representing client before appellate authorities.