Excisable Goods under Central excise act,1944
Section 2(d) of Central excise act,1944
As per explanation to section 2(d) of the Central Excise Act, 1944, ‘excisable goods’ means those goods specified in the schedule to Central Excise Tariff Act, 1985 as being subject to duty of excise and includes salt. Explanation to section 2(d) provides that ‘goods’ include 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.
- Excisable goods means those goods mentioned in schedule to Central Excise Tariff Act, 1985. Which means unless an item is mentioned in Central Excise Tariff Act it is not called as excisable goods. Therefore items which is not mentioned in schedule are referred as non excisable goods.
- Excisable goods includes goods having partial or full exemption. Excisable goods does not become non excisable goods merely by having an exemption notification.
- It also includes goods mentioned in Central Excise and Tariff Act whose rate is 0%, but does not include goods whose rate is ‘blank’ or ‘-‘ in central excise and tariff act.
Sec 2(7) of Sale of goods act defines ‘goods’ as “every kind of moveable property other than auctionable claims and money and includes stocks and shares, growing crops, grass and things attached to or forming part of land which are agreed to be served before sale or under contract of sale”.
Therefore we conclude that, all kind of moveable property can be classified as goods.
Explanation to section 2(d) provides that ‘goods’ include 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
From this definition it is clear that in order to be classified as goods an article should satisfy two basic conditions i.e ‘movablity’ and ‘marketability’.
Movablity means capability of a product of being moved from one place to another without breaking its original structure.
Let us have a look over it with examples:
- Land and building: Land and building are permanently attached to earth. They cannot be moved from one place to another and cannot be classified as goods.
- Plant: Plant refers to group to group of systems working together as whole. For example centralized air conditioning system, cold storage system. Such systems cannot be easily moved from one place to another easily. Therefore, we cannot classify them as goods.
- Machinery: Machinery on the other hand can be moveable or immovable in nature. Certain machines will be attached to the earth for improving the operational efficiency, they can be easily moved. Hence, can be classified as goods. On the other hand, there can be machines which are permanently attached to earth, and cannot be moved easily such machines cannot be classified as goods.
- Fixtures: Fixtures like kitchen cabinets, pantry units etc. cannot be easily moved and hence cannot be classified as goods.
- Furniture: Furnitures like table, chair etc. can be easily moved without breaking their structure and hence can be classified as goods.
Marketability means capability of a product of being bought and sold for a consideration and such goods shall be deemed to be marketable. Unless goods are being marketed they cannot be classified as goods. It is important to note that:
- Articles in crude or in elementary form cannot be bought and sold in the market and hence cannot be classified as goods.
- Even transient items can be held as marketable goods, if they can ordinarily put to market for sale.
- Merely if an article is mentioned in tariff, it cannot be classified as goods unless the condition of marketability is satisfied.
- Mere selling of goods does not make the product marketable.
Therefore we conclude that:
- Article should satisfy the conditions of movablity and marketability to be classified as goods.
- The test movablity and marketability should be tested at the time of manufacture.
- Mere mention in tariff does not an article dutiable. It should satisfy first the condition of goods.
- Excisable goods includes goods mentioned in central excise and tariff act. It also includes goods having exemption notification and goods chargeable to ‘nil’rate of duty.
- Those goods which are not mentioned in central excise and tariff act and goods mentioned in central excise and tariff act but rate column is blank are non excisable goods.
Excisable Goods under Central excise act,1944
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