ITT PROJECT ON
CENTRAL
EXISE DUTY
Submitted by:- Devendra parashar
Submitted to :- mr. Anil kumar sharma

THE LAW OF CENTRAL EXCISE IS GOVERND
BY THE FOLLOWING :-
 THE CENTRAL EXCISE ACT, 1944
 THE CENTRAL EXCISE TARIFF ACT, 1985
 CENTRAL EXCISE RULES, 2002
 CENVAT CREDIT RULES, 2004
 CENTRAL EXCISE VALUATION RULES, 2000

HAND SHAKE WITH EXCISE
THE CENTRAL EXCISE ACT 1944
Preamble
An act to consolidate and amend law relating to central
duties of excise.
Analysis
This act was consolidating multiple acts were earlier
prevailing.

SECTION 1: TITLE, EXTENT & COMMENCMENT
 This act may be called CEA, 1944.
 It extends to whole of India.

TYPES OF EXCISE DUTIES
 1.Basic duty of central
excise:-
This duty is levied at the
rates specified in the First
schedule to Central Excise
Tariff Act 1985.
 2. 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
Tariff

 3.Education cess on
excise duty:-
Education cess is a duty of
excise that has to be
calculated on the
aggregate of all duties of
excise ,including special
excise duty or any other
duty of excise.
 4.Excise duty on
clearances by 100 %
EOUs :-
100 per cent Export
oriented Units are expected
to export all their
production .However ,if they
clear their final product in
the domestic tariff area the
rate of excise duty will be
equal to that of the customs
duty on like article imported
in India.

TAXABLE EVENT FOR CENTRAL EXISE DUTY:-
• A duty of excise to be called central value added tax
(CENVAT)
• On all EXCISEABLE GOODS which are PRODUCED OR
MANUFACTURED IN INDIA
• Excluding goods produced or manufactured in special
economic zones
• At the rates set forth in the FIRST SCHDULE to the
CETA, 1985.

Conditions of “5m”:-
 To levy central excise duty condition of 5m must be
fulfilled
5M
MENTIONED: GOODS MUST BE MENTIONED IN
CETA , 1985
MOVABLE: GOODS MUST BE MOVABLE
MARKETABLE: GOODS MUST BE MARKETABLE
MANUFACTURE: GODDS MUST BE
MANUFACTURED OR PRODUCED
MOTHERLAND: GOODS MUST BE MANUFACTURED
OR PRODUCED AT MOTHERLAND
i.e. INDIA

WHO IS LIABLE TO PAY EXCISE DUTY ?
 The central excise duty is a tax on manufacture or
production of goods.
 The liability to pay excise duty lies on manufacturer
or the warehouse keeper.

MEANING OF MANUFACTURER
“Manufacturer” shall be construed accordingly and
shall include-
 Not only a person who employs hired labor in the
production
 Manufacturer of excisable goods
 But also any person who engages in their production
or manufacture on his own account
 Case laws- m.m khambatwala (sc), cibatul Ltd. (sc)

CENTRAL
EXCISE
RULES, 2002

CENTRAL EXCISE RULES, 2002
Procedural aspects
(Normal)
Admin aspect Spcl-cases (procedure)
Rule 9 - Registration
Rule 10 - Daily Stock
Account
Rule 11 - Goods to
be remove
invoice
Rule 12 - Filing of
excise
return
Rule 16 - Treatment
of sales
return
Rule 18 - Export under
rebate claim
Rule 19 - Export under
bond/ letter
of
undertaking
Rule 20 - Warehousing
Rule 21 - Remission of
ED
Rule 4 - ED is payable
on removal
Rule 5 - Date for
determination
of duty
Rule 6 - Self
assessment
of duty
Rule 7 - Provisional
assessment
Rule 8 - Payment of
ED
Rule 15 - Compound
levy scheme

RULE 4 & 5
WHO WHEN
RELEVENT
DATE
A. Manufacturer
B. W/H keeper
C. Buyer (only in
case of
malasis )
A. Removal from
factory
B. Removal from
W/H.
C. Receipt in his
factory.
A. Date of
removal
from
factory
B. Date of
removal
from W/H
C. Date of
receipt in
his factory

RULE 6
 RULE 6:- The assessee shall himself assess the duty
payable on any excisable goods on removal.
provided that in case of cigarettes, the
superintendent or inspector shall assess the duty
payable before removal by the assessee.

RULE 7 : PROVISIONAL ASSESSMENT
Applicable when assessee unable to determine value OR rate of duty
Apply to AC/DC AND execute the bond by filing form no. B2
AC/DC may order allowing payment of duty
on provisional basis
as specified by him
UNDERSTAND THIS FROM EXAMPLE IN NEXT SLIDE . . .

Apply to AC/DC for provisional assessment + execute the bond (FORM NO. B2)
If previously assessed @ ₹ 100 If previously assessed @ ₹ 80
Finalize @ ₹ 100 Finalize @ ₹ 80 Finalize @ ₹ 100 Finalize @ ₹ 80
Nothing to do
because
previously
assessed @ ₹
100 & finalize
at same
Refund with
interest @ 6%p.a
( int. on refund
eliminated by
F.A. 2013)
Subject to unjust
enrichment
Demand +
interest @ 18%
p.a
Nothing to do
because
previously
assessed @ ₹
80 & finalize at
same
WITH IN 6
MONTHS

RULE 8: MANNER OF PAYMENT
1. In case of non-SSI:
• the duty on goods removed from factory or warehouse during calender
month shall be paid by the 5th day of the following month.
• provided that in case of goods removed during the march, duty shall be
paid by 31st march.
2. In case of SSI:
• where an assessee is eligible to avail SSI exemption in a financial year
• the duty on goods cleared during a quarter shall be paid by the.
 6th of month, if duty is deposited electronically through internet
banking and
 5th of the month, in any other case following that quarter.
 Except in case of goods removed during the quarter January to march
for which duty shall be paid by the 31st march.
E-payment: provided further that an assessee, who has paid duty of ₹ 10 lakhs
or more including the amount of CCR, in preceding financial year, shall deposit
the duty electronically through internet banking .

RULE 8 & 12: MANNER OF PAYMENT & FILLING OF
RETURN
S.S.I NON S.S.I
PAYMENT:
quarterly 5th/ 6th
day of next
month after
ending quarter.
RETURN:
quarterly 10th
day of next
month after
ending quarter.
PAYMENT:
monthly 5th/6th
day of next
month.
RETURN:
monthly 10th
day of next
month.
FOR QUARTER/ MONTH ENDED ON 31ST MARCH :
31ST MARCH

RULE 10: DAILY STOCK ACCOUNT
1. Every assessee shall maintain proper records, on a daily basis, in a legible manner
indicating the particulars regarding
 description of goods produced or manufactured
 Opening balance
 Quantity produced or manufactured
 Quantity removed
 Inventory of goods
 Assessable value
 The amount of duty payable and
 Particulars regarding amount of duty actually paid.
2. Authentication: The first page and the last page of such account book shall be duly
authenticated by the manufacturer or his authorized agent.
3. Preservation of records: All such records shall be preserved for a period of five years
immediately after after the financial year to which such
records pertain.

VALUATION OF
GOODS
SEC. 4 & CEVR, 2000

SECTION 4: VALUATION OF EXCISEABLE GOODS FOR
THE PURPOSE OF CHARGING DUTY:-
1. Where under this Act, the duty of excise is chargeable on any
excisable goods with reference to their value, then on each removal
of goods, such value shall:
a) Be the transaction value – in a case where
• The goods are sold by the assessee
• For delivery at the place of removal
• The assessee and buyer of goods are not related and
• The price is sole consideration for sale
b) Be the value determined in such a manner as may be prescribed
in ANY OTHER CASE(including where goods are not sold).
2. The provisions of this section shall not apply in respect of any
excisable goods for which a tariff value has been fixed u/s 3(2).

CENTRAL
EXCISE
VALUATION
RULES, 2000

CENTRAL EXCISE VALUATION RULES, 2000:
RULE 1: TITLE
RULE 2: DEFINITIONS
RULE 3: APPLICABILITY OF RULES
RULE4: FREE SAMPLES –
The value of the excisable goods shall be based on the value of
such goods sold by the assessee at any other time nearest to time of the removal of
goods under assessment.
• But, if necessary adjustment can be made on account of the difference in
the dates of removal of such goods and of the excisable goods under
assessment.

RULE 5: PLACE OF DELEVERY DIFFFRENT FROM PLACE OF REMOVAL
RULE 6: VALUATION OF ADDITIONAL CONSIDERATION
RULE 7: VALUATION OF DEOPOT SELS
RULE 8: VALUATION OF CAPTIVE CONSUMPTION
RULE 9: VALUATION OF SALES TO RELATED PERSON
RULE 10: SALE TO INTER-CONNECTED UNDERTAKING
RULE 10A: GODDS MANUFACTURED BY JOB-WORKER
RULE 11: BEST JUDGEMENT VALUATION

VALUTION OF GOODS
Specific duty
based on
measurement like
weight, volume,
length etc.
Like cigarettes,
cement
Compounded
levy Scheme.
Duty = Amt.
fixed per month
or qtr. or
Annum based
on production
capacity.
Duties AD
valorem
ED= VALUE*ROD
Specific duty