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The Central Excise Act, 1944

[Act No. 1 of 1944]

[24th February, 1944]

An Act to consolidate and amend the law relating to Central Duties of Excise
Whereas it is expedient to consolidate and amend the law relating to Central duties of excise on goods manufactured or produced in certain parts of India.
It is hereby enacted as follows:-

Chapter I
Preliminary

Section 1. Short title, extent and commencement. -

(1) This Act may be called the Central Excise Act, 1944.
(2) It extends to the whole of India. ______________________________________________________________________________________________________________________
1. The words "and to Salt" omitted (w.e.f. 28-9-1996) by s. 69 of the Finance (No. 2) Act, 1996 (33 of 1996).

2. Statement of Objects and Reasons (Vide Gazette of India, 1943, Part-V, page 243). - The administration of internal commodity taxation in British India has grown up piecemeal over many years and has been considerably expanded during the last decade. Hitherto the introduction of a new central duty of excise has required the enactment of self-contained law and the preparation of a separate set of statutory rules. There are no less than 10 separate excise Acts (the excise on kerosene being covered by a part of the Indian Finance Act, 1922) and 11 sets of statutory rules; and there are also 5 Acts relating to salt, the duty on which is by a wide margin the oldest of our taxes on indigenous commodities. The taxes being closely akin to one another, the methods of collection follow the same general pattern, and many of the provisions of the various Acts are identical or closely similar; and this is the case also with many of the statutory rules. This agglomeration of statutes and regulations dealing with similar matters is neither convenient for the public nor conducive to well-organized administration. Moreover, under this disjunctive arrangement, we have not, and cannot readily construct, a comprehensive code of standing instructions for the governance of the excise staff and each set of statutory rules is burdened with departmental instructions in which the public has no concern or interest and which, even taken together, do not form an adequate administrative code.

2. It is accordingly proposed to consolidate in a single enactment all the laws relating to central duties of excise and to the tax on salt and to embody therein a Schedule, similar to that in the Indian Tariff Act, 1934, setting forth the rates of duty leviable on each class of goods. At the same time the statutory rules will be similarly amalgamated and disembarassed of their unnecessary details. The Act and the consolidated statutory rules, together with as many manuals of departmental instructions as may be necessary, will then form a complete Central Excise Code, which will simplify the administration of this branch of the revenue system and aid such further development as may be necessary; and any proposal for a new excise which may hereafter be laid before the Legislature may then take the simpler and more convenient form of a clause in the annual Finance Bill.

3. The intention of the Bill is to reproduce provisions already existing in the Acts which it is proposed to repeal, but in the process certain small amendments have been made, either in modernising the language or for dovetailing the provisions and otherwise adapting them to present circumstances. These amendments are the minimum consistent with such blending and adaptation.

4. The combination of a number of separate measures, each of which has been moulded to fit its particular subject, necessarily includes their special features as well as those which are common to others in the group and it follows that certain provisions which have hitherto applied only to certain goods will, after consolidation, become applicable over the whole field, either as a matter of course or by notification as circumstances may require. In particular the Bill provides that certain features of the salt law relating to transport by small coastal craft will become adaptable, as necessary, in the administration of other excise duties.

5. No interference of any kind is made in any of the existing duties. These have been merely collected from the various Acts and reproduced in the Schedule; and the item relating to salt has been so worded as to preserve, to the Central Legislature the right which it has so long exercised of voting annually on the rate of duty to be fixed.

6. There follows in the form of Notes on Clauses a tabular statement showing the source of each provision of the Bill.

New Delhi                                                                                                                                                                                           AJ Raisman
The 10th November, 1943.

(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint in this behalf.

Section 2.  Definitions. -

In this Act, unless there is anything repugnant in the subject or context, -

 (a)

"Adjudicating authority" means any authority competent  to pass any order or decision under this Act, but does not include the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963), Commissioner  of  Central  Excise (Appeals)  or Appellate Tribunal;

(aa)

 "Appellate Tribunal" means the Customs, Excise and Service Tax Appellate Tribunal constituted under section 129 of the Customs Act, 1962 (52 of 1962);

(aaa)

"broker" or "commission agent" means a person who in the ordinary course of business makes contracts for the sale or purchase of excisable goods for others;

(b)

 "Central Excise Officer" means the [Principal Chief Commissioner of Central Excise, Chief Commissioner of Central Excise, Principal Commissioner of Central Excise], Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional Commissioner of Central Excise, [Joint Commissioner of Central Excise] [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] or any other officer of the Central Excise Department, or any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer under this Act.]

(c)

 "curing" includes wilting, drying, fermenting and any  process for rendering an unmanufactured product fit for marketing or manufacture;

(d)

 "excisable goods" means goods specified in [the Fourth Schedule] as being subject to a duty of excise and includes salt;

Explanation - For the purposes of this clause, “goods” includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable.

(e)

factory"  means any premises, including the precincts thereof, wherein or in any part of which excisable goods are manufactured, or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on;

(ee)

"Fund" means the Consumer Welfare Fund established under section 12C;

(f)

"manufacture" includes any process, -

i)

ii)

iii)

incidental or ancillary to the completion of a manufactured product;

which is specified in relation to any goods in the Section or Chapter notes of [the Fourth Schedule] as amounting to [manufacture; or]

which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer;

and the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account;

(ff)

"National Tax Tribunal" means the National Tax Tribunal established under section 3 of the National Tax Tribunal Act, 2005;

(g)

"prescribed" means prescribed by rules made under this  Act;

(h)

"sale" and "purchase", with their grammatical variations and cognate expressions, mean any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration;

(i)

Omitted

(j)

Omitted

(jj)

Omitted

(k)

"wholesale dealer" means a person who buys or sells excisable goods wholesale for the purpose of trade or manufacture, and includes a broker or commission agent  who,  in  addition  to  making  contracts  for  the  sale  or  purchase  of  excisable goods for others, stocks such goods belonging to others as an agent for the purpose of sale.

Section 2A. References of certain expressions. -

  In this Act, save as otherwise expressly provided and unless the context otherwise requires, references to the expressions "duty", "duties", "duty of excise" and "duties of excise" shall be construed to include a reference to "Central Value Added Tax (CENVAT)".