Amendment status not verified — confirm the current text below against the official source.
Excise Duty. - Clause (6-B) of Section 3 of the Act defines "excise duty" and "coun- tervailing duty" with reference to Entry 51 of the List II in the Seventh Schedule to the Con- stitution. It would, therefore, be useful to see if any fee would be treated to be part of the excise duty or countervailing duty within the meaning given to "excise duty" and "counter- vailing duty" in Entry 51 of List II in the said Schedule. Excise duty may be imposed on the alcoholic liquors manufactured or produced in the State. Countervailing duties may be im- posed an similar goods manufactured or produced elsewhere in India. The words "Excise duty" generally indicate a duty imposed on home manufactured articles. It seems however that this term has not been precisely or authoritavely defined anywhere. In Entry No. 51 of List II of the 7th Schedule of the Constitution Excise duty on alcholic liquor, opium, Indian hemp and narcotic drugs is included as within States'jurisdiction. The term Ex- cise duty is generally used in contradistinction to the term Customs duty. Duties of custom are imposed on goods going abroad or imported from abroad. The duties of excise are levied on home made goods or goods made in the taxing country. Its primary and fundamental meaning is that it is a tax on articles produced or manufactured in the taxing country and intended for home consumption. An excise duty is a duty on production and though according to the economists it is an indirect tax capable of being passed on to the consumer as part of the price yet the mere passing of the duty is not its essential characteristics. Even if borne by the producer or manufacturer it does not cease to be a duty or excise. The alcoholic liquors declared fit for human consumption can be levied excise duty like a di- rect tax under entry No. 51 of list II in the Seventh Schedule of the Constitution. For a convenient ready reference the contents of entry No. 51 are reproduced as under :- "51. Duties excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or pro- duced else where in India :- (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs, and narcotics but not including medicinal and toilet preparations containing alcoholic or any substance included in paragraph (2) of the entry, but not including medical and toilet preparations containing alcohol or any substance included in sub- paragraph (i) of this entry." In order to bring any duty within entry 51 of list II of the Seventh Schedule of the Constitu- tion it has to be shown that if it fulfils the essential characteristics of an excise duty namely (i) uniformity of the incidence; (ii) that the duty has a close relation to the production or manufac- ture of goods (iii) if a levy is made for the privilege of selling excisable article and article has already borne the duty and the duty has to be paid, there must be clear terms in the charging section to indicate that what is being levied for the purpose of privilege of sale is in fact a duty of excise.