Central Excise duty is an indirect tax levied on those goods which are manufactured in India and are meant for home consumption. The taxable event is 'manufacture' and the liability of central excise duty arises as soon as the goods are manufactured.
Excise Duty is calculated on the basis of MRP / Abatement / Pro-rata.
The burden of this tax falls on consumer.
It is levied throughout India in same form.
Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and excise duty on rest of goods is collected by Central Government. Sales Tax is different from the Excise duty as former is a tax on the act of sale while the latter is a tax on the act of manufacture or production of goods.
Once Registration Certificate is granted, it has a permanent status unless it is suspended or revoked. A registration certificate is valid till the relevant unit is engaged in manufacturing of excisable goods. The registration certificate is not required to be renewed.
Registration under Central Excise is factory-wise and NOT assessee-wise. For example, A Pvt. Ltd. has 3 factories at Chennai, Gurgaon and Hyderabad during the financial year 2015-16. All three factories belong to the same company. Still, registration is to be obtained separately for every factory i.e. A Pvt. Ltd. will have to take 3 registrations.
Registration under Central Excise is mandatory. A manufacturer who is obligated to get registered, if does not get registered, then penalty will be imposed. This penalty will be equal to the amount of duty unpaid or Rs.10,000/- whichever is higher. In addition to the penalty, the goods manufactured without registration can also be confiscated. Prosecution under the Central Excise Act wherein, imprisonment upto 7 years can also be imposed for non-registration.
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