What are Excisable Goods
Section 2 (d) of Central Excise Act defines
Excisable Goods as
‘Goods specified in the First and Second Schedule to Central Excise Tariff Act,1985
as being subject to a duty of excise
and includes salt’.
‘Goods’ includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable.
Conditions to be satisfied to be classified as Excisable Goods
- They must be goods (Movable+ Marketable)
- They must be mentioned in First and Second Schedule to Central Excise Tariff Act,1985
- Rate of Duty must be specified on it.
- Salt is also considered Excisable Goods although no duty is charged on it.
Examine whether central excise duty is leviable in the following situations:-
Mohan Builders have construcdted an office building for M/s XYZ & Co.
No. Excise duty is leviable only when manufacture results in goods that are excisable.
For being called goods, items ought to be movable and marketable. Since office building is marketable but not movable, it is not 'goods' but an immovable property. Hence, excise duty is not leviable on construction of office building.
Mittal Brothers are the manufacturers of certain non-excisable goods. They manufactured
goods worth ` 2,00,000 on 25.06.20XX. These goods were removed from the factory on
20.09.20XX. On 01.09.20XX, these goods were brought within the purview of the Central
Excise Tariff and chargeable to excise duty @ 12.5%.
Discuss the leviability of excise duty on the goods manufactured by Mittal Brothers.
As per charging section 3 of the Central Excise Act, 1944, excise duty is levied on all
excisable goods which are produced or manufactured in India. However, as per rule 5 of the
Central Excise Rules, 2002, the rate of duty applicable to any excisable goods is the rate in
force on the date when such goods are removed from the factory.
In the given case, the goods were non-excisable at the time of manufacture. Hence, excise
duty liability will not arise even though such goods have been made excisable by bringing
them under Tariff prior to their removal.