3. Duties of excise to be levied and collected on certain goods.―(1) There shall be levied duties of
excise, at the rates specified in the Schedule, on all dutiable goods manufactured in India.
(2) The duties aforesaid shall be leviable—
(a) where the dutiable goods are manufactured in bond, in the State in which such goods are
released from a bonded warehouse for home consumption, whether such State is the State of
manufacture or not;
1. Subs. by Act 66 of 1976, s. 39, for clause (e) (w.e.f. 27-05-1976).
2. Subs. by s. 39, ibid., for clause (h) (w.e.f. 27-05-1976).
3. Subs. by Act 5 of 1964, s. 64, for clause (i) (w.e.f. 28-4-1964).
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(b) where the dutiable goods are not manufactured in bond, in the State in which such goods are
manufactured.
(3) Subject to the other provisions contained in this Act, the duties aforesaid shall be collected in such
manner as may be prescribed.
Explanation.―Dutiable goods are said to be manufactured in bond within the meaning of this section
if they are allowed to be manufactured without payment of any duty of excise leviable under any law for
the time being in force in respect of alcohol, 1
[narcotic drug or narcotic] which is to be used as an
ingredient in the manufacture of such goods.
4. Rebate of duty on alcohol, etc., supplied for manufacture of dutiable goods.―Where alcohol
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[narcotic drug or narcotic] had been supplied to a manufacturer of any dutiable goods for use as an
ingredient of such goods by, or under the authority of, the collecting Government and a duty of excise on
the goods so supplied had already been recovered by such Government under any law for the time being
in force, the collecting Government shall, on an application being made to it in this behalf, grant in
respect of the duty of excise leviable under this Act, a rebate to such manufacturer of the excess, if any, of
the duty so recovered over the duty leviable under this Act.
5. Recovery of sums due to Government.―In respect of the duty of excise and any other sums of
any kind payable to the collecting Government under any of the provisions of this Act or of the rules
made thereunder, the excise officer empowered by the said rules to levy such duty or require the payment
of such sums, may deduct the amount so payable from any money owing to the person from whom such
sums may be recoverable or due, which may be in his hands or under his disposal or control or may
recover the amount by attachment and sale of dutiable goods belonging to such person; and if the amount
payable is not so recovered, he may prepare a certificate signed by him specifying the amount due from
the person liable to pay the sum and send it to the Collector of the district in which such person resides or
conducts his business, and the said Collector on receipt of such certificate shall proceed to recover from
the said person the amount specified therein in the same manner as an arrear of land revenue.
6. Certain operations to be subject to licences.―(1) The Central Government may, by notification
in the Official Gazette, provide that from such date as may be specified in the notification, no person shall
engage in the production or manufacture of any dutiable goods or of any specified component parts of
ingredients of such goods or of specified containers of such goods or of labels of such containers except
under the authority and in accordance with the terms and conditions of a licence granted under this Act.
(2) Every licence under sub-section (1) shall be granted for such area, if any, for such period, subject
to such restrictions and conditions, and in such form and containing such particulars as may be prescribed.
7. Offences and penalties.―If any person—
(a) contravenes any of the provisions of a notification issued under section 6; or
(b) evades the payment of any duty of excise payable under this Act; or
(c) fails to supply any information which he is required by rules made under this Act to supply or
(unless with a reasonable belief, the burden of proving which shall be upon him, that the information
supplied by him is true) supplies false information; or
(d) attempts to commit or abets the commission of any offence mentioned in clause (a) or
clause (b),
he shall for every such offence be punishable with imprisonment for a term which may extend to six
months, or with fine which may extend to two thousand rupees, or with both.
8. Power of Courts to order forfeiture.―Any Court trying any offence under section 7 may order
the forfeiture to the collecting Government of any dutiable goods in respect of which the Court is satisfied
that an offence under this Act has been committed, and may also order the forfeiture of any alcohol, drugs
or materials by means of which the offence has been committed and of any receptacles, packages or
coverings in which any such goods or articles are contained and the animals, vehicles, vessels or other
1. Subs. by Act 66 of 1976, s. 39, for “opium, Indian hemp or other narcotic drug or narcotic” (w.e.f. 27-05-1976).
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conveyances used in carrying such goods or articles and any implements or machinery used in the
manufacture of such goods.