CHAPTER 1
Part-II
An Overview Of Central Excise1. Brief history and developments1.1 Central Excise duty is an indirect tax levied on goods manufactured in India. Thetax is administered by the Central Government under the authority of Entry 84 of theUnion List (List 1) under Seventh Schedule read with Article 226 of the Constitution ofIndia.
1.2 The Central Excise duty is levied in terms of the Central Excise Act, 1944 and therates of duty, ad valorem or specific, are prescribed under the Schedule I and II of theCentral 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 aremanufactured. The Central Excise Officers are also entrusted to collect other types ofduties levied under Additional Duties
(Goods of Special Importance) Act, AdditionalDuties
(Textiles and Textiles Articles) Act, Cess etc.
1.3 Till 1969, there was physical control system wherein each clearance ofmanufactured from the factory was done under the supervision of the Central ExciseOfficers. Introduction of Self-Removal procedure was a watershed in the exciseprocedures. Now, the assessees were allowed to quantify the duty on the basis ofapproved classification list and the price list and clear the goods on payment ofappropriate duty.
1.4 In 1994, the gate pass system gave way to the invoice-based system, and allclearances are now effected on manufacturer’s own invoice. Another major changewas brought about in 1996, when the Self-Assessment system was introduced. This systemis continuing today also. The assessee himself assesses his Tax Return and theDepartment scrutinises it or conducts selective audit to ascertain correctness of the dutypayment. Even the classification and value of the goods have to be merely declared bythe assessee instead of obtaining approval of the same from the Department.
1.5 In 2000, the fortnightly payment of duty system was introduced for allcommodities, an extension of the monthly payment of duty system introduced theprevious year for Small Scale Industries.
1.6 In 2001, new
Central Excise (No.2) Rules, 2001 have replaced the Central ExciseRules, 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 introductionof the new rules several changes have been effected in the procedures. The newprocedures are simplified. There are less numbers of rules, only 32 as compared to 234earlier. Classification declaration and Price declarations have also been dispensed with,the CENVAT Declaration having been earlier dispensed with in 2000 itself.
2. Administration of Central Excise2.1 The Central Excise law is administered by the Central Board of Excise andCustoms (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 CentralExcise heads each Zone. There are total 61 Commissionerates in these Zones headed byCommissioner of Central Excise. Divisions and Ranges are the subsequent formations,headed by Deputy/Assistant Commissioners of Central Excise and Superintendents ofCentral Excise, respectively.
2.2 For enforcing the central excise law and collection of Central Excise duty thefollowing types of procedures are being followed by the Central Excise Department:
a) Physical Control – Applicable to cigarettes only. Here assessment precedesclearance which takes place under the supervision of Central Excise officers;
b) Self-Removal Procedure – Applicable to all other goods produced ormanufactured within the country. Under this system, the assessee himselfdetermines the duty liability on the goods and clears the goods.
3. Tax payers assistance and responsiveness3.1 The CBEC have issued instructions from time to time for rendering assistance tothe taxpayers in the Commissionerates of Central Excise and Divisional Offices. Theseoffices are duty bound to provide necessary guidance to the public in all mattersconcerning Central Excise Law, procedure, tariff and exemptions etc.
3.2 The Commissioners of Central Excise are required to post knowledgeable officersof appropriate rank, senior Inspector or Superintendent to be in-charge of "Tax-payersAssistance Unit" in each Commissionerate and Divisional headquarter. The officer willhave easy access to the Deputy/Assistant Commissioners, Additional/JointCommissioners and Commissioner to seek their advice and guidance on the spot in caseof genuine doubts.
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, andclarification, where required.
3.4 In order to have a responsive tax administration, the Board has decided that allintimations, declarations and queries received from the Members of trade and industryshould be replied to in a time bound manner and with a sense of responsibility andaccountability. In order to achieve this, the following directions have been issued to theCentral Excise field formations:
(1) All declarations, intimations, etc. when send by FAX, e-mail, by post or byCourier shall be accepted by the field formations.
(2) Appointments should be given on e-mail on request from the trade;
(3) All queries by e-mail should be accepted and the replies sent by e-mail;
(4) Any query received from the trade must be answered within a maximum offour weeks from the date of receipt
(5) To make e-mail an effective mode of communication between theDepartment and the public, e-mail connectivity should be provided to alloffices in the field formations and properly maintained and wide publicity ofthe e-mail address should also be given.
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