Practice Area

CENTRAL EXCISE
Central Excise Duty, also referred to as CENVAT, is an tax . it’s levied on the products manufactured in India. it’s a Central Levy and is levied under Central Excise Act, 1944. However, the rates of duty are prescribed under Schedule I and Schedule II of the Central Excise Tariff Act, 1985. Though the levy is on the factum of manufacture, however, for administrative convenience, its collection has been postponed to the clearance of manufactured goods.

Every person engaged within the manufacture of dutiable goods, is required to get Central Excise Registration. However, if the worth of clearance remains within the SSI Exemption Limit, registration isn’t required. Presently the said exemption limit is Rs. 1.5 Crore once a year . The dealers and importers, desirous of passing on the CENVAT Credit to their buyers, are required to be registered. The manufacturers who desire to acquire duty free goods for specified purpose also are required to be registered.

As the rates of Central Excise Duty are mentioned in First and Second Schedule of the Central Excise Tariff Act, 1985. In these schedules, the Excisable goods are classified in groups and sub-groups. These groups are referred to as headings and sub-headings. Ascertaining applicable heading and sub-heading is understood as “Classification”. Determining correct classification is extremely important in Central Excise.

Central Excise Duty is usually payable as percentage useful of products (ad valorem). If buyers and sellers aren’t related and therefore the transaction value is sole consideration, then determining Assessable Value, doesn’t cause much problem. However, in certain situations, like where the buyers and sellers are related, the manufactured goods are consumed for further manufacture of exempted goods are for rendering services, then this process becomes complicated and a reason for dispute with the department.

Apart from source of revenue, the Central Excise Duty is additionally used as tool to realize other social and economic objectives. Therefore, the posh goods and harmful goods attract higher rate of duty, whereas partial or full exemption from duty is given to essentialities. At times, these exemptions are available, subject to fulfilling certain conditions.

To avoid Cascading effect, a scheme of tax decrease , referred to as CENVAT Credit, is additionally available in Central Excise. It enables the tax-payer to require credit of excise duty paid on inputs and repair Tax paid on the input services and such credit are often used for paying Excise Duty on final products. The CENVAT credit scheme is including with numerous conditions to form it brain teaser and Pandora box of controversies.

Elaborate provisions are their in Central Excise law for collecting duty not paid or short paid. there’s a well defined hierarchy of Tribunals and Courts to resolve the disputes. Central Excise Law has also elaborate provisions for refund of Duty, but the method of getting refund is extremely compbursome.

REGISTRATION

Persons requiring registration:-

Every manufacturer of dutiable excisable goods.
First and second stage dealers (including manufacturer’s depot and importers) meaning to issue Cenvatable invoices.
Persons holding warehouses for storing non-duty paid goods.
Persons who obtain excisable goods for availing end use based exemption.
Exporter-manufactures under rebate/bond procedure; Export Oriented Units and EPZ units which interact with the domestic economy (through DTA sales or procurement of duty free inputs).