Central Excise Act 1944

37. Power of Central Government to make rules.-

(1) The Central Government may make rules to carry into effect the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may—

¹[(i) provide for determining under section 4 the nearest ascertainable equivalent of the normal price;

(ia) having regard to the normal practice of the wholesale trade, define or specify the kinds of trade discount to be excluded from the value under section 4 including the circumstances in which and the conditions subject to which such discount is to be so excluded;]

²[(ib)] provide for the assessment and collection of duties of excise, the authorities by whom functions under this Act are to be discharged, the issue of notices requiring payment, the manner in which the duties shall be payable, and the recovery of duty not paid;

^3[(ibb) provide for charging or payment of interest on the differential amount of duty which becomes payable or refundable upon finalisation of all or any class of provisional assessments;]

⁴[(ic) provide for the remission of duty of excise leviable on any excisable goods, which due to any natural cause are found to be deficient in quantity, the limit or limits of percentage beyond which no such remission shall be allowed and the different limit or limits of percentage for different varieties of the same excisable goods or for different areas or for different seasons;]

⁵[(id) provide for the amount to be paid ³⁶[ for compounding and the manner of compounding’ ] ^Old[for compounding] under sub-section (2) of section 9A.]

(ii) prohibit absolutely, or with such exceptions, or subject to such conditions as the Central Government thinks fit, the production or manufacture, or any process of the production or manufacture, of excisable goods, or of any component parts or ingredients or containers thereof, except on land or premises approved for the purpose;

(iii) prohibit absolutely, or with such exceptions, or subject to such conditions, as the Central Government thinks fit, ⁶[***]the transit of excisable goods from any part of ⁷[India] to any other part thereof;

(iv) regulate the removal of excisable goods from the place where produced, stored or manufactured or subjected to any process of production or manufacture and their transport to or from the premises of a ⁸[registered] person, or a bonded warehouse, or to a market;

(v) regulate the production or manufacture, or any process of the production or manufacture, the possession, storage and sale of salt and so far as such regulation is essential for the proper levy and collection of the duties imposed by this Act, or of any other excisable goods, or of any component parts or ingredients or containers thereof;

(vi) provide for the employment of officers of the ^9[Government] to supervise the carrying out of any rules made under this Act;

(vii) require a manufacturer or the licensee of a warehouse to provide accommodation within the precincts of his factory or warehouse for officers employed to supervise the carrying out of regulations made under this Act and prescribe the scale of such accommodation;

(viii) provide for the appointment, licensing, management and supervision of bonded warehouses and the procedure to be followed in entering goods into and clearing goods from such warehouses;

(ix) provide for the distinguishing of goods which have been ^10[manufactured after registration], of materials which have been imported under licence, and of goods on which duty has been paid, or which are exempt from duty under this Act;

(x) impose on persons engaged in the production or manufacture, storage or sale (whether on their own account or as brokers or commission agents) of salt, and, so far as such imposition is essential for the proper levy and collection of the duties imposed by this Act, of any other excisable goods, the duty of furnishing information, keeping records and making returns, and prescribe the nature of such information and the form of such records and returns, the particulars to be contained therein, and the manner in which they shall be verified;

(xi) require that excisable goods shall not be sold or offered or kept for sale in ¹¹[India] except in prescribed containers, bearing a banderol, stamp or label of such nature and affixed in such manner as may be prescribed;

(xii) provide for the issue of ¹²[registration certificate] and transport permits and the fees, if any, to be charged therefor:

Provided that the fees for the licensing of the manufacture and refining of salt and saltpetre shall not exceed, in the case of each such licence, the following amounts, namely:—

(xiii) provide for the detention of goods, plant, machinery or material, for the purpose of exacting the duty, the procedure in connection with the confiscation, otherwise than under section 10 or section 28, of goods in respect of which breaches of the Act or rules have been committed and the disposal of goods so detained or confiscated;

³⁷[(xiiia) provide for withdrawal of facilities or imposition of restrictions (including restrictions on utilisation of CENVAT credit) on manufacturer or exporter or suspension of registration of dealer, for dealing with evasion of duty or misuse of CENVAT credit;]

(xiv) authorise and regulate the inspection of factories and provide for the taking of samples, and for the making of tests, of any substance produced therein, and for the inspection or search of any place or conveyance used for the production, storage, sale or transport of salt, and so far as such inspection or search is essential for the proper levy and collection of the duties imposed by this Act, of any other excisable goods;

(xv) authorise and regulate the composition of offences against, or liabilities incurred under this Act or the rules made there under;

(xvi) provide for the grant of a rebate of the duty paid on goods which are exported out of India or shipped for consumption on a voyage to any port outside India ¹³[including interest thereon];

¹⁴[    *    *    *    *    *    *    *    *    *    *    *    *]

¹⁵[(xvia) provide for the credit or duty paid or deemed to have been paid on the goods used in, or in relation to the manufacture of excisable goods];

¹⁶[(xviaa) provide for credit of service tax leviable under chapter V of the Finance Act, 1994, paid or payable on taxable services used in or in relation to, the manufacture of excisable goods,]

¹⁷(xvib) provide for the giving of credit of sums of money with respect to raw materials used in-the manufacture of excisable goods];

¹⁸[(xvic) provide for charging and payment of interest as the case may be, on credit of duty paid or deemed to have been paid on the goods used in, or in relation to, the manufacture of excisable goods where such credit is varied subsequently;]

(xvii) exempt any goods from the whole or any part of the duty imposed by this Act;

¹⁹[(xviia) provide incentives for increased production or manufacture of any goods by way of remission of, or any concession with respect to, duty payable under this Act;

(xviii) define an area no point in which shall be more than one hundred yards from the nearest point of any place in which salt is stored or sold by or on behalf of the Central Government, or of any factory in which saltpetre is manufactured or refined, and regulate the possession, storage and sale of salt within such area;

(xix) define an area round any other place in which salt is manufactured, and regulate the possession, storage and sale of salt within such area;

(xx) authorise the ²⁰[Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963)] or ²¹[Commissioners of Central Excise] appointed for the purposes of this Act to provide, by written instructions, for supplemental matters arising out of any rule made by the Central Government under this section;

²²[(xxi) provide for the publication, subject to such conditions as may be specified therein, of names and other particulars of persons who have been found guilty of contravention of any of the provisions of this Act or of any rule made there under;]

^23[(xxii) provide for the charging of fees for the examination of excisable goods intended for export out of India and for rendering any other service by a Central Excise Officer under this Act or the rules made there under;]

²⁴[(xxiii) specify the ²⁵[form and manner] in which application for refund shall be made under section 11Bsection 11B

(xxiv) provide for the manner in which money is to be credited to the Fund;

(xxv) provide for the manner in which the Fund shall be utilised for the welfare of the consumers;

(xxvi) specify the form in which the account and records relating to the Fund shall be maintained;]

²⁶[(xxvii) specify the persons who shall get themselves registered under section 6 and the manner of their registration.]

²⁷[(xxviii) provide for the lapsing of credit of duty lying unutilised with the manufacturer of specified excisable goods on an appointed date and also for not allowing such credit to be utilised for payment of any kind of duty on any excisable goods on and from such date.]

²⁸[(2A) The power to make rules conferred by clause (xvi) of sub-section (2) shall include the power to give retrospective effect to rebate of duties on inputs used in the export goods from a date not earlier than the changes in the rates of duty on such inputs].

(3) In making rules under this section, the Central Government may provide that any person committing a breach of any rule shall, where no other penalty is provided by this Act, be liable to a penalty not exceeding ²⁹[five thousand rupees].

³⁰[(4) Notwithstanding anything contained in sub-section (3), and without prejudice to the provisions of section 9 , in making rules under this section, the Central Government may provide that if any manufacturer, producer or licensee of a warehouse -

(a) removes any excisable goods in contravention of the provisions of any such rule, or

(b) does not account for all such goods manufactured, produced or stored by him, or

(c) engages in the manufacture, production or storage of such goods without having applied for the ³¹[registration] required under section 6 , or

³²[(d) contravenes the provisions of any such rule with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the manufacturer, producer or licensee shall be liable to a penalty not exceeding the duty leviable on such goods or ³⁸[five thousand rupee] ^Old[³⁵two thousand rupees] ^Old[ ten thousand rupees ], whichever is greater;]

³³[(5) Notwithstanding anything contained in sub-section (3), the Central Government may make rules to provide for the imposition upon any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under this Act or the rules made there under, a penalty ³⁴[not exceeding the duty leviable on such goods or³⁸[five thousand rupee] ^Old[³⁵two thousand rupees] ^Old[ ten thousand rupees], whichever is greater.]

Refer Notification No. 34/2016- Central Excise (N.T.) Dated 26/07/2016

Refer Notification No. 23/2014- Central Excise (N.T.) Dated 06/08/2014

1. Clause (i) was re-lettered as clause (ib) and that clause (ib) and that clause as so re-lettered and the clause (i) and (ia) were inserted by s. 3 of the Central Excise  and salt (Amendment) Act, 1973 (22 of 1973).

2. Clause (i) was re-lettered as clause (ib) and that clause as so re-lettered and the clauses (i) and (ia) were inserted by s. 3 of the Central Excise and salt (Amendment) Act, 1973 (22 of 1973).

3. Inserted by s. 131 of the Finance Act, 1999 (27 of 1999).  

4. This clause was inserted [w.e.f. 1-7-1978 vide Notification No. 227A/6/78-SRP (CCX), dated 19-6-1978] by s. 25 of the customs Central Excise  and salt and Central Boards of Revenue (Amendment) Act, 1978 (25 of 1978).

5. This clause was inserted vide Finance (No. 2) Bill, 2004.

6. Certain words were omitted by s. 2 and sch. Of the Taxation Laws (Extension to Jammu and Kashmir) Act, 1954 (41 of 1954).

7. This word was substituted for the words “the states” by s. 11 and sch. Iv of the Finance Act, 1950 (25 of 1950).

8. Substituted (w.e.f. 14-5-1992) by s. 113 of the Finance Act, 1992 (18 of 1992).

9. This word was substituted by the A.O. 1950.

10. Substituted (w.e.f. 14-5-1992) by s. 113 of the Finance Act, 1992 (18 of 1992).

11. This word was substituted for the words “the states” by s. 11 and sch. IV of the Finance Act, 1950 (25 of 1950).

12. Substituted (w.e.f. 14-5-1992) by s. 113 of the Finance Act, 1992 (18 of 1992).

13. Inserted (w.e.f. 26-5-1995) by s. 78 of the Finance Act, 1995 (22 of 1995).

14. The Proviso was omitted by s. 2 of the Central Excise and salt (Amendment) Act, 1957 (49 of 1957).

15. This clause was inserted by s. 51 of the Finance Act, 1986 (23 of 1986).

16. This clause was inserted vide Finance (No. 2) Bill, 2004.

17. This clause was inserted by s. 96 of the Finance Act, 1987 (11 of 1987).

18. Inserted (w.e.f. 26-5-1995) by s. 78 of the Finance Act, 1995 (22 of 1995).

19. This clause was inserted (w.e.f. 28-2-1982) by s. 48 of the Finance Act, 1982.

20. These words were substituted (w.e.f. 1-1-1964) by s. 5 of the Central Boards of Revenue Act, 1963 (54 of 1963).

21. Substituted (w.e.f. 26-5-1995) by s. 70 of the Finance Act, 1995 (22 of 1995).

22. This clause was inserted by s. 22 of the Customs, Gold (Control) and Central Excise and Salt (Amendment0 Act, 1973) (36 of 1973).

23.  Inserted by s. 6 of the Central Excise and salt (Amendment) Act, 1985 (79 of 1985).

24.    Inserted [w.e.f. 20-9-1991] vide Notification No. 30/91-C.E. (N.T.), dated 19-9-1991] by s. 8 of the Central Excise and Customs Laws (Amendment) Act, 1991 (No. 40 of 1991).

25. Substituted (w.e.f. 26-5-1995) by s. 78 of the Finance Act, 1995 (22 of 1995).

26. Inserted (w.e.f. 14-5-1992) by s. 113 of the Finance Act, 1992 (18 of 1992).

27.  This Clause Inserted and shall be deemed to have been inserted with effect from 16-3-1995 by s. 131 of the Finance Act, 1999 (27 of 1999).

28.  Inserted (w.e.f. 26-5-1995) by s. 78 of the Finance Act, 1995 (22 if 1995).

29. Substituted (w.e.f. 12-5-2000) for the words “two thousand rupees and that any articles in respect of which any such breach is committed shall be confiscated” by s. 108 of the Finance Act, 2000 (10 of 2000).

30. This sub-section was inserted by s. 38 of the Finance Act, 1968 (19 of 1968).

31. Substituted (w.e.f. 14-5-1992) by s. 113 of the Finance Act, 1992 (18 of 1992).

32. Substituted (w.e.f. 12-5-2000) by s. 108 of the Finance Act, 2000 (10 of 2000).

33. This sub-section was inserted by s. 22 of the customs, Gold (Control) and Central Excise and salt (Amendment) Act, 1973 (36 of 1973).

34.  Substituted (w.e.f. 12-5-2000) by s. 108 of the Finance Act, 2000 (10 of 2000).  

35. Changes w.e.f 01.06.2007 vide Chapter IV of Finance Bill 2007

36. Substituted vide chapter IV of Finance Bill 2009

37. Inserted vide Chapter IV of Finance Bill 2010

38 Substituted vide Chapter IV of Finance Act 2015

39. Refer Vide Notification No. 27/2017-Central Excise (N.T.) Dated 23/11/2017

40. Refer Vide Notification No. 46/2018 Customs (N.T) Dated 25/05/2018

41. Refer Vide:- Notification No. 82/2019 Customs (N.T) Dated 15/11/2019

42. Refer Vide:- Notification No. 07/2020 Customs (N.T) Dated 28/01/2020

43. Refer Vide:- Notification No. 56/2020 Customs (N.T) Dated 13/07/2020

Relevant Notifications & Circulars

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