The Central Excise Act was enacted on February 24, 1944 with an intention to consolidate and modify the legal principles dealing with Central Excise duties on commodities that are produced and fabricated in some parts of Indian Territory. The Central Excise duties and other duties imposed on the commodities shall include the Central Value Added Tax as well.
The Central value Added Tax shall be collected and imposed on the excisable commodities which are produced in the Indian Territory as provided under the Central Excisable Tariff Act of 1985, but the Act excludes the commodities that are manufactured in the Special Exclusive Zone. The Act provides for the imposition of special excise duty on all excisable products denoted in the Second Schedule to the Act of 1985. If the excise duty is charged on the excisable commodities on the basis of the value of commodities, then the Act provides for certain guidelines to be followed for calculating the value of such commodities.
The Central Government shall indicate and mention in any required goods the retail sale price on the package of those commodities as provided under Standards of Weights and Measures Act of 1976 or any other law or rule in force in the territory of India. But if the products are excisable or liable to tax based on the value, then the value shall be the retail price of the product as notified by the Central Government. The abatement amount shall be deducted for calculating the excise duty and shall consider the sales tax and other taxes that are payable on such commodities.
The manufacturer takes out the commodities without stating the retail price on the package of the commodity or states an incorrect retail price; such commodities are likely to be confiscated and the correct retail price shall be stated on the commodity as prescribed under the provisions of the legislation. Where certain goods are found to be scarce in quantity due to natural grounds, the Central Government shall prescribe rules for remission of excise duty to be charged on the commodities. The Act provides for penalty for contravention of the provisions of the Act or offences mentioned under the Act with imprisonment or with other penalties specified under the present legislation.
The Central government is authorized under the Act to constitute a Consumer Welfare Fund and the amount shall be credited to the fund as prescribed and the fund shall be utilized for the benefit of the consumers by the Central Government according to the rules framed by the Government. The Central Excise Officer shall perform duties and exercise powers according to the terms of the Act and he can confer such powers on an officer inferior to him.
Moreover, the Act bestows authority for the Central Government to constitute Customs and Central excise Settlement Commission to resolve disputes under the Customs Act of 1962. The disputes shall be heard either by the Chairman or the Vice-Chairman including two other members. The procedures before the Commission shall be supposed to be judicial proceedings within the meaning of Indian Penal Code. On settling disputes the authority shall comply with the principles of natural justice and adjournment of the case shall be granted only for a maximum of three times.
The aggrieved person shall prefer an appeal against the order of the Central Excise Officer to the Central Excise Commissioner. The appeals in opposition to the order of the Commissioner and Central board of Excise and Customs shall be referred to the Appellate Tribunal. Where the case contains a substantial question of law an appeal shall be heard by the High Court and thereafter by the Supreme Court from the decisions of the Appellate Tribunal. The procedure to file an appeal before the Supreme Court shall be based on the provisions of the Civil Procedure Code.
The Central Excise Act was enacted for the purpose of imposing and collecting excise duties for commodities and to prevent illegal imports and exports. But there are different cases where the provisions of the Act are violated due to the improper exercise of powers and discharging of duties by the officials. The Central Government has formulated Central Excise (Appeal) Rules, 2001 as per the powers conferred by the Act which prescribes the procedure to file appeal before the Commissioner, Appellate Tribunal, High Court and the Supreme Court. The rule was further amended by the Central Excise (Appeal) (Amendment) Rules in 2013 which substituted a new provision for filing appeal before the Appellate Tribunal.