The Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (hereinafter referred to as “The Act”) came into force on 27th April, 1955. The Act is applicable to the whole of India. The objective of the Act is to levy and collect excise duties on medicinal and toilet preparations consisting of alcohol, opium, Indian hemp and narcotic substances. The seventh schedule also lists the same. Entry 84 of the Union List, which falls under seventh schedule of the Constitution of India, provides that the Union government would be the regulating authority for the imposition of excise duty on medicinal and toilet preparations consisting of alcohol, opium, Indian hemp and narcotic substances. Excise duty is a source of revenue for Government and is a form of indirect tax. It is charged on excisable goods produced and manufacture in India. The duty is not upon sale of goods. Therefore, the Act came into existence to manage and curb the alcohol and related goods consumption and to use it in an effective way.
The Act consists of twenty – one sections. A schedule is also attached to the Act where the list of dutiable goods along with its rates is given. Dutiable goods as per clause (c) of Section 2 are those medicinal and toilet preparation goods in which they are subject to duties of excise. Section 3 specifies that the dutiable goods which are manufactured without any payment of duty on alcohol and related goods or which are manufactured with payment of duty would be leviable to excise duty.
The Medicinal and Toilet Preparations (Excise Duties) Rules, 1956 came into force on 9th March, 1957. Section 19 of the Act empowers the Central Government to make rules in order to carry out the purposes of the Act.
The Central Government, at times, might pass an order to restrict the use of dutiable goods for manufacture or production in a particular area. In such a case or where the payment of excise duty has been evaded, then the person will be punished with imprisonment for six months or a fine of two thousand rupees or with both. The court can order forfeiture of above mentioned goods to the collecting authority. The Act empowers excise officer to arrest any person whom he believes to have contravene the laws or if he declines to give his name and residence to the excise officer.
The Act imposes liability on the owner or occupier of the land to give notice to the magistrate or to the officer concerning customs, excise or to any police officer in case if any dutiable goods are produced on that land contravening the provisions of this Act. It is a liability for the owner of that land because if that owner willfully connives with the manufacturer, in that case, the owner would become liable to imprisonment for six months and/or fine of five hundred rupees. Therefore, it is a duty of the owner or occupier of that land to give such notice to the concerned officer. Any searches or arrests made by the excise officer would be carried out in accordance with Code of Criminal Procedure, 1898.
The Act also takes care of the accused to send them expeditiously to the excise officer or police officer who would take the accused further to the nearest Magistrate without any delay as per section 15 of the Act. Section 16 provides the time taken to produce the accused to the nearest magistrate which is within twenty four hours of such arrest excluding the time taken to travel to such magistrate. If the excise officer has been given charge of such accused, in that case, section 16 provides that the excise officer would first inquire into the charge framed against him. For such inquiry, excise officer would be deemed to be a police officer and would also exercise the powers given under Code of Criminal Procedure, 1898.
The excise officer if on duty cannot withdraw himself from the duty unless express permission has been acquired by any senior officer otherwise that excise officer would be punishable with imprisonment for three months and/or fine which would extend up to three months pay. The Act immunizes the collecting government and the excise officer from any suit or legal proceeding for any order passed by them in good faith.
The schedule attached to the Act was amended by the Finance Act, 2000 in order to change the rates of duty to ad valorem which came into force on 1st March, 2003. Therefore, the Act helped in curbing the consumption of alcohol for the manufacturing industries.
by Neha Dayal.