3.Central Excise Rules ,1944 2.Central Excise tariff Act 1985 1.Central Excise Act 19942.

This is the basic law related to the levy and collection of duties of central excise .However this Act does not contain the rate at which
duties are imposed3.

This Act classifies various goods on which central excise duties are levied and prescribes the rates at which the duty is payable4.
All manufacturers of excisable goods are required to register under these rules .The registration is valid as long as production activity
continues and no renewals are necessary5.

1.Basic duty of central excise This duty is levied at the rates specified in the First schedule to Central Excise Tariff Act 19852. Specific
duty of excise Some commodities like pan masala and cars have special excise duties levied on them .These items are covered under in
schedule II to the Central Excise Tariff6.

7. 4.Excise duty on clearances by 100 % EOUs 100 per cent Export oriented Units areexpected to export all their production .However
,ifthey clear their final product in the domestic tariffarea,the rate of excise duty will be equal to that ofthe customs duty on like article
imported in India

Taxable event for charge of duty of central excise is the manufacturer or production of goods in India In this context ,the Supreme Court
has observed : Excise duty is not directly on the goods ,but manufactured thereof. Though both excise duty and sales duty levied with
reference to goods ,the two are very different imposts.In one case ,the imposition is on the act of manufactured or production ,while in the
other it is on the act of sale.8.

9. For condition must be present for the charge of central excise duty:1.The duty is on goods2.The goods must be excisable3 .The goods
must be manufactured or produced4.Such manufacture or production must be take place in India

10. For an item to be considered goods for the purpose of the levy of central excise duty ,it must satisfy two requirements:1.Movability
Goods must be movable.Duty cannot be levied on immovable property .Central excise duty cannot imposed on plant and
machinery2.Marketability Goods must be marketable .The goods must be known in the market and must be capable of being bought or
sold

11. For the liability of duty of central excise toarise ,the item in question should not only begoods it should also be excisable goods
.Agoods become excisable if and only if it ismentioned in the Central Excise Tariff Act1985

12. The third condition that must be satisfiedfor becoming liable to pay duties of centralexcise is that the goods must bemanufactured or
produced

13. Finally ,for the liability to pay centralexcise duty to arise the goods must bemanufactured or produced in India
The central excise duty is a tax on manufacture or production of goods .Hence ,the liability to pay excise duty lies on manufacturer or the
producer14.

4.ad -valorem basis 3.Maximum retail price 2.Tariff duty 1.Specific duty15. The duty of central excise is charged on four bases:
Some of the goods on which duty is charged on the basis are as follows item Basis Cigarette Length Matches Box of 100 Sugar Quintal
Cement Per tonne It is the duty payable on the basis of some physical feature of the product unit like weight ,length ,volume,thickness,
etc.16.

17. The government has the power to declarea value on the basis of which duty of centralexcise will be charged .When the
governmentdeclare the value ,the duty is charged on thevalue and the actual value of the goods isignored

18. Some manufactures had started the practice of central excise by resorting to some questionable practices .In order to check these
malpractices ,a new basis of valuation was introduced ,that is ,the maximum ratail price(MRP)-based valuation Eg:television sets,DVD
players ,Cosmetics,Toilet preparations and chocolates

19. The first three bases of valuation are appliedfor only a few goods.In a large majority ofcases the duty of central excise is payable
onthe basis of the value of the goods ,called theassessable value.

1. EXCISE CLEARANCE PROCEDUREINTERNATIONAL TRADEOPERATIONS

Indirect Tax Direct Tax A tax may be defined as a "pecuniary burden laidupon individuals or property owners to supportthe
government, a payment exacted by legislativeauthority. A tax is not a voluntary payment ordonation, but an enforced contribution.2.
INTERNATIONAL TRADEOPERATIONS

Is a kind of charge imposed directly on the taxpayer and paid directly to the government by theperson to the government.3. Direct Tax
An indirect tax is a tax collected by anintermediary (such as a retail store) from theperson who bears the ultimate economic burdenof the
tax (such as the customer). An indirect taxis one that can be shifted by the taxpayer tosomeone else4. Indirect Tax

Securities Transaction Tax (STT) Value Added Tax (VAT) Sales Tax Service Tax Central Excise Duty Customs Duty5. Some
Important Indirect TaxesImposed in India

Central Government levies excise duty under theCentral Excise Act, 1944 and the Central ExciseTariff Act, 1985. It is charged on such
goodswhich are manufactured in India and are meantfor domestic consumption.6. Central Excise Tax

Neutralize Subsidies Add Revenue Protect People7. Objectives of the Excise Duty

Validity of Registration Issue of certificate Application for registration Persons requiring Registration8. Procedure of registration for
centralExcise

Rule 6, of Central Excise Rule 2002 authorizesthe assessee to assess the duty himself and thisis known as self assessment Procedure
Applicable rates of Central Excise Duty in theinvoice. Value of Goods Declaration of Quantity of Goods9. Assessment of
DutyInvolves:

MRP Basis Ad Valorem Fixed10. Ways of Assessing the Duty

Bank keeps 1 copy for its records and returns two(One for exporter and another to the range officealong with quarterly return.) Duty for
goods clearance should be paid by the5th day of the following month but SSI units areallowed to pay by 15th day. Duty is deposited
incash or by cheque through TR6 challans in thenotified bank branches. Challan must indicateregistration number, classification of
good.11. Payment of Duty

Excisable goods shall be exported within sixmonths from the date on which they were clearedfor export from the factory of manufacturer.
Dateto be mentioned on ARE-1. Special Permission for exports from other factoryor warehouse other than registered. Payment of
Duty under Daily Stock Account.However duty could be paid on monthly basis orfortnightly.12. Clearance under Rebate Claim

Rebate claim for those excisable goods export ofwhich is prohibited is not admissable. Rebate claim admissible only if the rebate claim
is500 or more.13. Contd

Prepared in quintuplicate Running Serial Number ARE-1 is prescribed by Central Board of Exciseand Customs as a document for
exciseclearance.14. Application for Remission of Excise(ARE-1)

Dispatch of Goods by Self Sealing and SelfCertification Sealing of Goods and Examination at the place ofdispatch15. Procedure

16. Sealing of Goods and Examinationat the place of dispatchCopies Colour Submitted toOriginal White Superintendent/inspector of C.E.
shallreturn it to the exporterafter endorsementDuplicate Buff Superintendent/inspector of C.E. shallreturn it to the exporterafter
endorsementTriplicate Pink To officer with whomrebate is to be claimedQuadruplicate Green Retained for officialrecordsQuintuplicate
Blue Export PromotionCouncil

17. Dispatch of Goods by Self Sealing andSelf CertificationCopies Submitted to Further ActionOriginal Sent to the place ofexport along
with goodsDuplicate Sent to the place ofexport along with goodsTriplicate To the Superintendentwithin 24 hours ofremovalTo the officer
fromwhom rebate is to beclaimedQuadruplicate To the Superintendentwithin 24 hours ofremovalFor recordsQuintuplicate Export
PromotionCouncil

and duplicate copy to rebate claim office Return the original copy to exporter Customs examine and cite shipping bill number Original
duplicate copy of ARE-1 to be presentedalong with the goods18. Examination of goods at the place ofexports

Manufacturer Exporter- Letter of Undertaking (Forexporter with good record), no certificate isrequired. However compliance with
acceptanceto proof of export and other terms and conditionis expected. This is Bond with nil security. Exporter- furnish Bond and obtain
Certificate(Security or Surety with Bond)19. Clearance Without Payment ofDuty

Ensure that at the time (period of 7 days from the time ofremoval) of debit sufficient credit is available to cover it Duty involved
(calculated on transacted value and duty rate) Description of goods from a particular factory/ warehouse For 1-3 month depending on
the track record of thecompany Certificate of Bond Merchant Exporter- Bond certificate + Invoice (asproof of export) Manufacturer
Exporter- LUT + Invoice20. Contd..

Shall record the clearance in his account as duty payablebut forgone under rule 19.21. Contd..

Dispatch of goods by self sealing and selfcertification Sealing of Goods and examination at the place ofdispatch22. Procedure

23. Sealing of Goods and Examinationat the place of dispatchCopies Colour Submitted toOriginal White Superintendent/inspector of C.E.
shallreturn it to the exporterafter endorsementDuplicate Buff Superintendent/inspector of C.E. shallreturn it to the exporterafter
endorsementTriplicate Pink To officer with whomrebate is to be claimedQuadruplicate Green Retained for officialrecordsQuintuplicate
Blue Export PromotionCouncil

24. Dispatch of Goods by Self Sealing andSelf CertificationCopies Submitted to Further ActionOriginal Sent to the place ofexport along
with goodsDuplicate Sent to the place ofexport along with goodsTriplicate To the Superintendentwithin 24 hours ofremovalTo the bond
acceptingauthorityQuadruplicate To the Superintendentwithin 24 hours ofremovalTo the officer fromwhom rebate is to
beclaimedQuintuplicate Export PromotionCouncil

Bill of LadingTo bond accepting authorities and credit would beavailed.Non export within 6 months attracts payment ofduty and high
interest rates. Shipping Bill Original ARE-125. Re- Credit Against Proof