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INTRODUCTION
An excise or excise tax (sometimes called an excise duty) is a type of tax
charged on goods produced within the country (as opposed tocustom s
duties, charged on goods from outside the country). It is a tax on the
production or sale of a good.
•

Typicalexamp les of excise duties are taxes on tobacco, alcohol and

gasoline.

Definition
The Oxford Dictionary gives the origin of the word to be the Dutch accijns,
it presumed to originate from the Latin accensare – "to tax".

The New Oxford English Dictionary says the same thing: "a tax levied on
certain goods and commodities produced or sold within a country
and on licenses granted for certain activities".

Adam Smith says, "The motive for the implementation of excise should
be nothing more than to curb the pursuit of goods and services
harmful to our health and morals”.

Samuel Johnson, meanwhile, is somewhat more harsh in his 1755

dictionary: "Excise - A hateful tax levied on commodities, and adjudged
not by the common judges of property, but wretches hired by those to
whom excise is paid."

Features of excise duty

Deducing from the types of goods, services and areas listed as

excisable by many governments, and considering the thinkers' comments,
a logical conclusion might be that excise duty was originally invented for
some or all of the following reasons:
•

to protect people –
○ from harming their health by abusing substances such as
tobacco and alcohol, thus making excise a kind ofsum ptuar y
tax
○ from harming themselves and others indirectly and morally by

engaging in activities such as gambling and prostitution (see

below) (includingsoliciting andpim ping) – thus making it a type
of vice tax or sin tax
○ from harming those around them and the general environment,

both from overuse of the above-mentioned substances, and

including curbing activities contributing to pollution (hence the
tax on hydrocarbon oil and of other environmental taxes, as in
the UK), or from harming the natural environment (hence the
tax on hunting) - thus also making excise a kind of pigovian tax.
•

to provide monies needed –

○ For the extra healthcare and other public expenditures which

will be needed as a direct or indirect result of excisable

activities, such as lung cancer from smoking or road accidents
resulting fromdr ink- dr iving.

○ For defense - including taxation directly levied on other

countries' militaries and/or governments, such as the UK's
taxation on "visiting forces".
•

to punish –

Many US states impose taxes on drugs, and the UK government

imposes excise on money laundering and on "visiting forces" (which
can, from a legal standpoint, also be interpreted as "invading forces").
These are, clearly, not included in the statute books because the
government expects smugglers, launderers and invaders to pay for
the right to conduct their harmful and illegal activities, but so that
greater punishments and reparations/war reparations - based mainly
around tax evasion - can be imposed in the case that the perpetrator
is caught and tried. Aside from the extra revenue, this of course can
also act as a deterren

OBJECTIVES

CENTRAL EXCISE DUTY-1944

• Meaning and nature of excise duty

• Various concept and definitions used in Central Excise Act

• Rates of excise duty

• Classification and Valuation of goods for excise purpose

• When and how excise duty is paid

• Registration and clearance of good s; and

• Scheme of setoff of the excise duty.

NATURE OF EXCISE DUTY

As per section 3 of Central Excise Act (CEA)excise duty is levied if: -

1) There is a good.

2)Good s must be moveable

3)Good s are marketable

4)Good s are mentioned in the central excise tariff act (CETA).

5) Gods are manufactured in India.

CENTRAL EXCISE DUTY-1944

1) services such as doctors treating the patients accountants preparing the accounts, in these cases
service tax are levied.

2) Immovableg oo ds such as roads, bridges and buildings.

3) Non-Marketableg oo ds, i.e.,go od s for which no market exists, e.g. Melted iron ore at
1600 degree Celsius.
4)Go od s that are not mentioned in CETA; and
5)Go od s manufactured or produced out of India. If production or
manufacture is in special economic zone then noexcise duty is levied