INTRODUCTION

The Central Excise duties are the largest source of revenue for the country. Approximately 30% of the total revenue receipts are collected from Central Excise duties. The levy and collection of Central Excise duties is under the authority of Central Excise Act, 1944. Section 3 (also known as the charging section) provides for the levy and collection of Central Excise duty.

The rate and amount of duty as well as the items on which duties are levied are those which are indicated in the Central Excise Tariff Act, 1985 and the schedule therein. The taxable event for Central Excise duty as per Section 3 of CEA (Central Excise Act) 1944 is the manufacture or production of goods.

It means that Central Excise duty is leviable as soon as the goods are manufactured or produced. The items on which the excise duty is levied are known as excisable goods.

For the purpose of administrative convenience the actual collection of duty is done at the time of removal of goods from the place of manufacture of production. The rate of duty, which is levied, is the rate of duty applicable to such goods or which is in force at the time of actual removal.

Additional Excise Duty (AED): - This duty is levied on certain specified goods in terms of various other statutes such as:

CENTRAL EXCISE CONTROL

Following types of control have been proscribed for the levy and collection of Central Excise duties: -

PHYSICAL CONTROL

Under the physical control system the manufactured goods are removed form the place of manufacture under the supervision of the Central Excise officers on after the assessment and payment of appropriate Central Excise duty. The goods are removed on an invoice indicating the duty paid which is countersigned by the Central Excise officer. The physical control system is applicable on in respect of manufacturers of cigarettes and matches.

SELF-REMOVAL PROCEDURE.

Under the Self-Removal Procedure (SRP) the goods are removed on payment of duty and against invoices signed by the assess. The actual assessment of the duty paid is done afterwards by the Central Excise officers on monthly returns filed by the assess.

In this case much more responsibility has been vested on the assesses to pay the duty correctly and remove the goods only on payment of the duty assessed by him. However, in this system the assesses is required to file a declaration (Rule 173B of CER 1944) giving classification of the goods, tariff heading, rate of duty and the exemption notification availed of if any.

He is also required to sell the goods against an invoice at prices, which are in accordance with Section 4 of the Central Excise Act 1944. The Self-Removal Procedure also provides that the assesses should maintain records of production, removals, raw material, MODVAT accounts, accounts of PLA.

Monthly returns are scrutinised by the Central Excise Officers so as to ensure proper payment of duty on the goods manufactured and removed.

In the record based control system of assessment more trust is given to the assesses. The records based control is applicable to 20 commodities at present vide Notification No 24/86 dated 10.02.86. Reliance is placed on the assessee’s books of account, invoices, etc., which are generally accepted for purpose of assessment.

COMPOUNDED LEVY SCHEME

The other system of assessment and Levy is known as the Compounded levy scheme. The basic scheme provides for payment of duty on the basis of the estimated production of the commodity by the assesses over a specific period of time, the basis of which may be the number and the types of machines used for manufacture.

The advantage of this scheme is that it frees the manufacturer from observing day to day Central Excise formalities and for maintenance of detailed accounts.

The self removal scheme also has provisions for bringing duty paid goods back to the factory for purposes of repair, reconditioning etc., within a period of one year and for claiming refund of the duty originally paid (Rule 173H and 173L)

The important aspect of Central Excise law is the crucial date for determination of rate of duty. This is because the rates of duty keep changing due to issue of various exemptions and particularly so when the budget is presented to Parliament normally at the end of February.

For an excise officer or assesses to calculate and determine the correctness of duty paid the crucial date is most important.

The effective date which is applicable to a particular commodity will be the rate in force on the date on which the goods are actually removed from the factory in terms of Rule 9A of the CER-1944. That is, the date on which the goods leave the factory is the crucial date for determining the rate of duty.

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