Power of Central Government to charge excise duty on the basis of capacity of production in respect of notified goods
Section 3A of the Central Excise Act, 1944 deals with power of Central Government to charge excise duty on the basis of capacity of production in respect of notified goods. Notwithstanding anything contained in Section 3, where the Central Government, having regard to the nature of the process of manufacture or production of excisable goods of any specified description, the extent of evasion of duty in regard to such goods or such other factors as may be relevant, is o The Act came into force on 28 Feb 1944.
1[3A. Power of Central Government to charge excise duty on the basis of capacity of production in respect of notified goods.-- (1) Notwithstanding anything contained in Section 3, where the Central Government, having regard to the nature of the process of manufacture or production of excisable goods of any specified description, the extent of evasion of duty in regard to such goods or such other factors as may be relevant, is of the opinion that it is necessary to safeguard the interest of revenue, specify, by notification in the Official Gazette, such goods as notified goods and there shall be levied and collected duty of excise on such goods in accordance with the provisions of this section.
(2) Where a notification is issued under sub-section (1), the Central Government may, by rules,--
(a) provide the manner for determination of the annual capacity of production of the factory, in which such goods are produced, by an officer not below the rank of Assistant 2[Principal Commissioner of Central Excise or Commissioner of Central Excise and such annual capacity shall be deemed to be the annual production of such goods by such factory; or
(b) (i) specify the factor relevant to the production of such goods and the quantity that is deemed to be produced by use of a unit of such factor; and
(ii) provide for the determination of the annual capacity of production of the factory in which such goods are produced on the basis of such factor by an officer not below the rank of Assistant 2[Principal Commissioner of Central Excise or Commissioner of Central Excise] and such annual capacity of production shall be deemed to be the annual production of such goods by such factory:
Provided that where a factory producing notified goods is in operation during a part of the year only, the annual production thereof shall be calculated on proportionate basis of the annual capacity of production:
Provided further that in a case where the factor relevant to the production is altered or modified at any time during the year, the annual production shall be re-determined on a proportionate basis having regard to such alteration or modification.
(3) The duty of excise on notified goods shall be levied, at such rate, on the unit of production or, as the case may be, on such factor relevant to the production, as the Central Government may, by notification in the Official Gazette, specify, and collected in such manner as may be prescribed:
Provided that where a factory producing notified goods did not produce the notified goods during any continuous period of fifteen days or more, the duty calculated on a proportionate basis shall be abated in respect of such period if the manufacturer of such goods fulfils such conditions as may be prescribed.
(4) The provisions of this section shall not apply to goods produced or manufactured, by a hundred per cent export-oriented undertaking and brought to any other place in India.
Explanation 1.-- For the removal of doubts, it is hereby clarified that for the purposes of Section 3 of the Customs Tariff Act, 1975 (51 of 1975), the duty of excise leviable on the notified goods shall be deemed to be the duty of excise leviable on such goods under the 3[Fourth Schedule, read with any notification for the time being in force.
Explanation 2.-- For the purposes of this section, the expression hundred per cent export-oriented undertaking" shall have the meaning assigned to it in Section 3.
4[Explanation 3.-- For the purposes of sub-sections (2) and (3), the word "factor" includes "factors".]]
Section 3A, The Central Excise Act, 1944 (Act 1 of 1944).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Commnr. of Cent. Excise & Customs vs Venus Castings P. LTD
Court's Decision & Legal Precedent
A manufacturer who has exercised the option to make payment of duty based on total furnace capacity installed in the factory under Rule 96ZO(3) of the Central Excise Rules cannot subsequently claim the benefit of determination and re-determination of actual production capacity under Section 3A(4) of the Central Excise Act, 1944, as the composition scheme under Rule 96ZO(3) and the regular assessment procedure under Section 3A(4) are two alternative optional procedures mutually exclusive in nature, and once an assessee elects one scheme, he must accept both its advantages and disadvantages without claiming hybrid benefits. The explicit exclusion of Section 3A(4) in Rule 96ZO(3) is valid, not ultra vires, and consonant with the statutory scheme.
On this section: Core provision enabling charge of excise duty on basis of production capacity; Section 3A(4) specifically addresses re-determination of capacity and duty based on actual production; the Court interpreted that these are alternative optional procedures
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… of his duty liability for the period from the 1st day of September, 1997 to the 31st day of March, 1998, or any other financial year, as the case may be, subject to the condition that the manufacturer shall not avail of the benefit, if any, under the proviso to sub-section (3) or under sub-section (4) of the section 3A of the Central Excise Act, 1944 (1 of 1944). 10th of each succeeding month. In other words, sub-rule (3) provides for the levy of a concessional rate of excise duty on manufacturers who are willing to opt for a scheme of making the payment of tax on a monthly basis instead of postponing the payment till the end …
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… of his duty liability for the period from the 1st day of September, 1997 to the 31st day of March, 1998, or any other financial year, as the case may be, subject to the condition that the manufacturer shall not avail of the benefit, if any, under the proviso to sub-section (3) or under sub-section (4) of the section 3A of the Central Excise Act, 1944 (1 of 1944). 10th of each succeeding month. In other words, sub-rule (3) provides for the levy of a concessional rate of excise duty on manufacturers who are willing to opt for a scheme of making the payment of tax on a monthly basis instead of postponing the payment till the end …
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… of his duty liability for the period from the 1st day of September, 1997 to the 31st day of March, 1998, or any other financial year, as the case may be, subject to the condition that the manufacturer shall not avail of the benefit, if any, under the proviso to sub-section (3) or under sub-section (4) of the section 3A of the Central Excise Act, 1944 (1 of 1944). 10th of each succeeding month. In other words, sub-rule (3) provides for the levy of a concessional rate of excise duty on manufacturers who are willing to opt for a scheme of making the payment of tax on a monthly basis instead of postponing the payment till the end …
Made under this section, and citing it
23 instruments state that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
- Notification No. 2 /2017-Central Excise (N.T.)Notification 2017
- Notification No. 22/2017-Central Excise (N.T.)Notification 2017
- Notification No. 3 /2017- Central Excise (N.T.)Notification 2017
- No. 10/2016-Central Excise (N.T.)Notification 2016
- No. 9/2016-Central Excise (N.T.)Notification 2016
- No. 13 /2015--Central Excise (N.T.)Notification 2015
- No. 4 /2015-Central Excise (N.T.)Notification 2015
- No. 5 /2015-Central Excise (N.T.)Notification 2015
- Notfn No 03/2014-CX (NT)Notification 2014
- Notfn No 04/2014-CX (NT)Notification 2014
- Notfn No 22/2014-CX (NT)Notification 2014
- Notfn No 19/2012-CX (NT)Notification 2012
- Notfn No 20/2012-CX (NT)Notification 2012
- Notification No. 17/2010- CE (N.T.)Notification 2010
- Notification No. 18/2010- CE (N.T.)Notification 2010
- Notification No. 05/2009-CE (N.T.)Notification 2009
- Notification 04/2000-CE (N.T)Notification 2000
- Notification No.11/2000-CE (N.T)Notification 2000
- Notification No.13/2000-CE (N.T)Notification 2000
- Notification No.14/2000-CE (N.T)Notification 2000
- Notification No.26/2000-CE (N.T)Notification 2000
- Notification No.29/2000-CE (N.T)Notification 2000
- Notification No.38/2000-CE (N.T)Notification 2000
Another 8 instruments name this provision in its title or its text without being made under it.
- Circular No. 1063/2/2018-CXCircular 2018
- Notification No. 22/2010- CE (N.T.)Notification 2010
- Circular no. 522/18/2000-CXCircular 2000
- Notification No.17/2000-CE (N.T)Notification 2000
- Notification No.23/2000-CE (N.T)Notification 2000
- Notification No.30/2000-CE (N.T)Notification 2000
- Notification No.31/2000-CE (N.T)Notification 2000
- circular no. 508/4/2000-CXCircular 2000
Questions about Section 3A
What have the courts held on Section 3A of the Central Excise Act?
Commnr. of Cent. Excise & Customs vs Venus Castings P. LTD (05 Apr 2000) is the leading judgment on this section among those set out below: Core provision enabling charge of excise duty on basis of production capacity; Section 3A(4) specifically addresses re-determination of capacity and duty based on actual production; the Court interpreted that these are alternative optional procedures.
How do I find court cases under Section 3A of the Central Excise Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Central Excise Act 1944 3A, section 3A Central Excise Act 1944, section 3A of the Central Excise Act. People searching for it also type section 3a central excise act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with Commnr. of Cent. Excise & Customs vs Venus Castings P. LTD (05 Apr 2000).
What should I read with Section 3A of the Central Excise Act, and has it changed?
Its own text turns on section 3 (Duty specified in the Fourth Schedule to be levied), Customs Tariff Act 3 (Levy of additional duty equal to excise duty, sales tax, local taxes and other charges), so none of them can safely be read on its own. 3 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there are 23: most recently Notification No. 2 /2017-Central Excise (N.T.) (2017), then Notification No. 22/2017-Central Excise (N.T.) (2017), and 21 more.
When did Section 3A of the Central Excise Act come into force?
Section 3A of the Central Excise Act, cited as Central Excise Act 1944 3A, came into force on 28 Feb 1944, having been enacted on 24 Feb 1944. It is in force as at the date shown on this page.
Other sections of this Act
- 4. Valuation of excisable goods for purposes of charging of duty of excise1751 words
- 11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded1442 words
- 11B. Claim for refund of duty and interest, if any, paid on such duty1342 words
- 35B. Appeals to the Appellate Tribunal1302 words
- 32F. Procedure on receipt of an application under Section 32-E1167 words
- 11AC. Penalty for short-levy or non-levy of duty in certain cases1093 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 17 Oct 2026. This page is not a substitute for legal advice.