Central Excise Duty is levied in terms of the Central Excise Act 1944 and the Rates of Duty, ad valorem or specific, are prescribed under the Schedule I and II of the Central Excise Tariff Act, 1985.
Brief history and developments
Administration of Central Excise
Tax payers' assistance and
An Overview Of Central Excise
- Brief history and developments
1.1 Central Excise duty is an indirect tax levied on goods manufactured in
India. The tax is administered by the Central Government under the authority
of Entry 84 of the Union List (List 1) under Seventh Schedule read with
Article 226 of the Constitution of India.
1.2. The Central Excise duty is levied in terms of the Central Excise Act,
1944 and the rates of duty, ad valorem or specific, are prescribed under the
Schedule I and II of the Central Excise Tariff Act, 1985. 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. The Central Excise
Officers are also entrusted to collect other types of duties levied under
Additional Duties (Goods of Special Importance) Act, Additional Duties
(Textiles and Textiles Articles) Act, Cess etc.
1.3 Till 1969, there was physical control system wherein each clearance of
manufactured from the factory was done under the supervision of the Central
Excise Officers. Introduction of Self-Removal procedure was a watershed in
the excise procedures. Now, the assessees were allowed to quantify the duty
on the basis of approved classification list and the price list and clear
the goods on payment of appropriate duty.
1.4 In 1994, the gate pass system gave way to the invoice-based system, and
all clearances are now effected on manufacturer’s own invoice. Another major
change was brought about in 1996, when the Self-Assessment system was
introduced. This system is continuing today also. The assessee himself
assesses his Tax Return and the Department scrutinises it or conducts
selective audit to ascertain correctness of the duty payment. Even the
classification and value of the goods have to be merely declared by the
assessee instead of obtaining approval of the same from the Department.
1.5 In 2000, the fortnightly payment of duty system was introduced for all
commodities, an extension of the monthly payment of duty system introduced
the previous year for Small Scale Industries.
1.6 In 2001, new Central Excise (No.2) Rules, 2001 have replaced the Central
Excise Rules, 1944 with effect from 1st July, 2001. Other rules have also
been notified namely, CENVAT Credit Rules, 2001, Central Excise Appeal
Rules, 2001etc. With the introduction of the new rules several changes have
been effected in the procedures. The new procedures are simplified. There
are less numbers of rules, only 32 as compared to 234 earlier.
Classification declaration and Price declarations have also been dispensed
with, the CENVAT Declaration having been earlier dispensed with in 2000
- Administration of Central Excise
2.1 The Central Excise law is administered by the Central Board of
Excise and Customs (CBEC or Board) through its field offices, the Central
Excise Commissionerates. For this purpose, the country is divided into 10
Zones and a Chief Commissioner of Central Excise heads each Zone. There are
total 61 Commissionerates in these Zones headed by Commissioner of Central
Excise. Divisions and Ranges are the subsequent formations, headed by
Deputy/Assistant Commissioners of Central Excise and Superintendents of
Central Excise, respectively.
2.2 For enforcing the central excise law and collection of Central Excise
duty the following types of procedures are being followed by the Central
- Physical Control – Applicable to cigarettes only. Here assessment
precedes clearance which takes place under the supervision of Central
- Self-Removal Procedure – Applicable to all other goods produced or
manufactured within the country. Under this system, the assessee himself
determines the duty liability on the goods and clears the goods.
- Tax payers' assistance and responsiveness
3.1 The CBEC have issued instructions from time to time for
rendering assistance to the taxpayers in the Commissionerates of Central
Excise and Divisional Offices. These offices are duty bound to provide
necessary guidance to the public in all matters concerning Central Excise
Law, procedure, tariff and exemptions etc.
3.2 The Commissioners of Central Excise are required to post knowledgeable
officers of appropriate rank, senior Inspector or Superintendent to be
in-charge of "Tax-payers' Assistance Unit" in each Commissionerate and
Divisional headquarter. The officer will have easy access to the
Deputy/Assistant Commissioners, Additional/Joint Commissioners and
Commissioner to seek their advice and guidance on the spot in case of
3.3 The "Tax-payers' Assistance Unit" in addition to rendering advice to the
assessees, should also help them in meeting the officer concerned for
necessary guidance, and clarification, where required.
3.4 In order to have a responsive tax administration, the Board has decided
that all intimations, declarations and queries received from the Members of
trade and industry should be replied to in a time bound manner and with a
sense of responsibility and accountability. In order to achieve this, the
following directions have been issued to the Central Excise field
- All declarations, intimations, etc. when send by FAX, e-mail, by
post or by Courier shall be accepted by the field formations.
- Appointments should be given on e-mail on request from the trade;
- All queries by e-mail should be accepted and the replies sent by
- Any query received from the trade must be answered within a maximum
of four weeks from the date of receipt
- To make e-mail an effective mode of communication between the
Department and the public, e-mail connectivity should be provided to all
offices in the field formations and properly maintained and wide
publicity of the e-mail address should also be given.