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The Additional Duties of Excise (Goods of Special Importance) Act, 1957 was enacted on December 24, 1957 for the purpose of imposing and collecting of additional excise duty on some commodities. It also intends to allocate a portion of the net proceeds in between States in compliance with the doctrine of allocation created and proposal of the Finance Commission according to its Report 2 of December 18, 1990. The Act extends to the entire Indian Territory including the State of Jammu and Kashmir. According to the Act, additional duties include the excide duties imposed and collected as per the provisions of the enactment. The term State used in the Act excludes Union Territory. Section 3 of the Act deals with imposition and collection of additional duties by the Central Government. The additional duties shall be imposed and collected at the rate provided under Schedule 1 Column 4 with regard to the commodities provided under Column 1 of the said Schedule. These goods shall be generated and manufactured within India and includes the entire commodities that are stocked up in the premises of the factory or storehouse where the above said commodities are produced or stored or in any other precincts near thereto.

The excise duty pointed out earlier with regard to the commodities provides shall be charged on such commodities in furtherance of excise duties under The Central Excise Act of 1944 or any other legislation that is being enforced. The provision provided under the Central Excise Act of 1944 which consists of reimbursement, immunity from duty, offence and punishments shall be pertinent with regard to imposition and collection of excise duties described in the Schedule to the Act. On all financial years, a portion of the net proceeds of further duties imposed and collected throughout that financial year shall be paid to the States from the Consolidated Fund of India according to the provisions of the Act. The Act further provides that all expenses to be paid according to the terms of the Act shall be paid out of the Consolidated Fund of India.

The Act empowers the Central Government to formulate rules to prescribe the mode under which and the procedure to be followed to pay off the expenses according to the provisions of the enactment. It also lays down the modifications to be made between every financial year and other supplementary and additional matters. The Government can frame the rules after notifying in the Gazette of India. The rules framed in compliance with the provisions of the Act shall be laid before the Lok Sabha and Rajya Sabha when such House is in session for entire duration of thirty days that may be included in single session or more than one consecutive session. But prior to the ending of the session right away subsequent to the session or consecutive session mentioned above, the Lok Sabha and Rajya Sabha concur regarding some changes to the rule or have the same opinion that the rule should not be formulated, then the rule shall be enforced only on such alterations or the rule shall not be made.

Conversely, the alteration or invalidation of the rule shall be devoid of injustice to the legality of whatever thing done beforehand as per that rule. Before 1958, the Act declared some commodities to be of exceptional significance in inter-state deal or business which was subsequently repealed. The Schedule 1 of the Act was amended according to the mode described under Schedule 13. It aims to pull out sugar as well as textile from the definition of the Act which facilitates the States to impose Value Added Tax on certain commodities.

The Parliament seeks to amend the present Act by initiating The Additional Duties of Excise (Goods of Special Importance) Amendment Bill, 1995 which considers to be come into effect on April 1, 1995.