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Section5A
The Central Excise Act, 1944

Power to grant exemption from duty of excise

In force From 28 Feb 1944 Act 1 of 1944 As on 17 Oct 2026

Act 1 of 1944 Ministry Finance Enacted 24 Feb 1944 In force 28 Feb 1944 Cited by 8 provisions Instruments 12

Section 5A of the Central Excise Act, 1944 deals with power to grant exemption from duty of excise. If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after removal) as may be specified in the notification, excisable The Act came into force on 28 Feb 1944.

1[5A. Power to grant exemption from duty of excise.--(1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after removal) as may be specified in the notification, excisable goods of any specified description from the whole or any part of the duty of excise leviable thereon:

Provided that, unless specifically provided in such notification, no exemption therein shall apply to excisable goods which are produced or manufactured--

(i) in a 2[free trade zone 3[* * *]] and brought to any other place in India; or

(ii) by a hundred per cent export-oriented undertaking and 4[rought to any other place in India].

Explanation.--In this proviso, 2["free trade zone" 5[* * *] and hundred per cent export-oriented undertaking" shall have the same meanings as in Explanation 2 to sub-section (1) of Section 3.

6[(1A) For the removal of doubts, it is hereby declared that where an exemption under sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall not pay the duty of excise on such goods.]

7[(2) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in each case, exempt from the payment of duty of excise, under circumstances of an exceptional nature to be stated in such order, any excisable goods on which duty of excise is leviable.]

8[(2A) The Central Government may, if it considers it necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under sub-section (2), insert an explanation in such notification or order, as the case may be, by notification in the Official Gazette at any time within one year of issue of the notification under sub-section (1) or order under sub-section (2), and every such explanation shall have effect as if it had always been the part of the first notification or order, as the case may be.]

(3) An exemption under sub-section (1) or sub-section (2) in respect of any excisable goods from any part of the duty of excise leviable thereon (the duty of excise leviable thereon being hereinafter referred to as the statutory duty) may be granted by providing for the levy of a duty on such goods at a rate expressed in a form or method different from the form or method in which the statutory duty is leviable and any exemption granted in relation to any excisable goods in the manner provided in this sub-section shall have effect subject to the condition that the duty of excise chargeable on such goods shall in no case exceed the statutory duty.

Explanation.-- "Form or method", in relation to a rate of duty of excise means the basis, namely, valuation, weight, number, length, area, volume or other measure with reference to which the duty is leviable.

(4) Every notification issued under sub-rule (1), and every order made under sub-rule (2), of Rule 8 of the Central Excise Rules, 1944, and in force immediately before the commencement of the Customs and Central Excises Laws (Amendment) Act, 1988 shall be deemed to have been issued or made under the provisions of this section and shall continue to have the same force and effect after such commencement until it is amended, varied, rescinded or superseded under the provisions of this section.]

9[(5) Every notification issued under sub-section (1) or sub-section (2-A) shall, unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette.]

(6) 10[* * *ic9533]

Section 5A, 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

  1. s. 3 Duty specified in the Fourth Schedule to be levied

Referred to by 8

  1. s. 23C Application for advance ruling
  2. s. 38 Publication of rules and notifications and laying of rules before Parliament
  3. Finance Act s. 161 Amendment of notification issued under sub-section (4) of section 15 of the Oil Industry (Development) Act read with section 5A of the Central Excise Act
  4. Finance Act s. 110 Amendment of notification number GSR 95(E), dated 1st March, 2006 issued under section 5A of Central Excise Act
  5. Finance Act s. 111 Amendment of notification number GSR 163(E), dated 17th March, 2012 issued under section 5A of Central Excise Act
  6. Finance Act s. 104 Amendment of notification issued under section 5A of the Central Excise Act
  7. Finance Act, 2024 (No. 2) s. 112 Amendment of notification issued under section 5A of Central Excise Act, retrospectively
  8. Finance Act, 2024 (No. 2) s. 113 Amendment of notification issued under section 5A of Central Excise Act, retrospectively

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.

  1. Ambika Interntional vs Commissioner of Central Excise Central Excise

    Supreme Court of India 10 Nov 2017 Binding (SC) Reportable

    Court's Decision & Legal Precedent

    When excise duty is wholly exempted under an exemption notification issued under Section 5A of the Central Excise Act, 1944, the Education Cess and Higher Education Cess levied as surcharges @ 2% on the excise duty are also exempted and refundable, because: (1) Education Cess is levied and calculated on the aggregate of duties of excise; (2) Section 93(3) of the Finance Act, 2004 provides that provisions of the Central Excise Act relating to refunds and exemptions shall apply to Education Cess; (3) A surcharge on a primary tax partakes the character of the primary tax and is subject to the same exemption and refund provisions; (4) There cannot be any surcharge when the basic duty itself is Nil; and (5) The government's own circulars clarify that Education Cess is not payable when excise duty is exempted.

    On this section: Power of Central Government to exempt excisable goods from whole or any part of duty of excise if satisfied it is necessary in public interest. Court held this power extends to exempting surcharges that are levied on the exempted duty.

    Read the full order on eCourts India

  2. Commr. of Central Excise, Nagpur vs Universal Ferro & Allied Chem. Ld. &an

    Supreme Court of India 06 Mar 2020 Binding (SC) Reportable

    Court's Decision & Legal Precedent

    An Export Oriented Unit (EOU) is entitled to undertake job work for a Domestic Tariff Area (DTA) unit and claim concessional excise duty benefits under Exemption Notification No. 8/97 dated 1.3.1997, provided: (1) the goods are produced or manufactured by the 100% EOU; (2) they are manufactured wholly from raw materials produced or manufactured in India; (3) they are allowed to be sold in India in accordance with paragraph 9.9(b) of EXIM Policy with valid permission from the Development Commissioner; and (4) the transaction constitutes a 'sale' within the meaning of Section 2(h) of Central Excise Act 1944 (transfer of possession for valuable consideration). The definition of 'sale' under Central Excise Act cannot be restricted by the narrower definition under Sale of Goods Act 1930. The proviso to Section 5A(1) does not preclude exemption notifications from applying to EOU clearances if specifically provided in the notification. The 2001 amendment to Section 5A does not impliedly repeal Exemption Notification No. 8/97 as there is no direct conflict between the provisions.

    On this section: Power to grant exemption from duty subject to conditions, with proviso that exemptions do not apply to EOU clearances unless specifically provided, applied to interpret scope of exemption notifications

    Read the full order on eCourts India

  3. Hero Motocorp LTD vs Union of India

    Supreme Court of India 17 Oct 2022 Binding (SC) Reportable

    Court's Decision & Legal Precedent

    The doctrine of promissory estoppel cannot operate against the legislative functions of the State. When the legislature enacts a statute that specifically provides for rescinding benefits granted under an earlier statute, the earlier representation or promise made by the Government cannot be enforced against the State through the doctrine of promissory estoppel. This principle applies even when the Government had made an unequivocal representation on which entities had relied and altered their position to their detriment. The only exception to this principle is where it is necessary to prevent fraud or manifest injustice. Furthermore, when a change in policy is in the larger public interest, the State cannot be prevented from withdrawing an incentive which it had granted through an earlier notification. In the present case, the rescission of tax exemption notifications through Notification No. 21/2017 pursuant to the statutory mandate of Section 174(2)(c) of the CGST Act cannot be challenged on the basis of promissory estoppel, as the GST regime represents a material change in circumstances and a sea change in the taxation system from origin-based to destination-based taxation, which is in the larger public interest.

    On this section: Earlier provision under which 2003 Notification was issued granting exemptions; now repealed by CGST Act

    Read the full order on eCourts India

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.

  1. Supreme Court of India 17 Oct 2022 SCIN010155252021

    … Various other incentives were also provided vide the said O.M. of 2003. 6.2 In pursuance to the said O.M. of 2003, a 2003 Notification was notified in exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and sub-section (3) of Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978. The said notification provided for exemption for a period …

    Read this order on eCourtsIndia

  2. Supreme Court of India 17 Oct 2022 SCIN010212852020

    … Various other incentives were also provided vide the said O.M. of 2003. 6.2 In pursuance to the said O.M. of 2003, a 2003 Notification was notified in exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and sub-section (3) of Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978. The said notification provided for exemption for a period …

    Read this order on eCourtsIndia

  3. Supreme Court of India 22 Apr 2020 SCIN010183752015

    … It is in the background of these facts and with a view to give effect to such a policy, the Government in exercise of powers conferred under Section 5A of the Central Excise Act modified the refund mechanism so as to provide that excise duty refund would be allowed only to the extent of duty payable on actual value addition made by the manufacturers undertaking manufacturing activities in these areas. As a result of the notification impugned before the High Court, …

    Read this order on eCourtsIndia

Made under this section, and citing it

5 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.

Another 7 instruments name this provision in its title or its text without being made under it.

All subordinate legislation

Questions about Section 5A

What have the courts held on Section 5A of the Central Excise Act?

Ambika Interntional vs Commissioner of Central Excise Central Excise (10 Nov 2017) is the leading judgment on this section among those set out below: Power of Central Government to exempt excisable goods from whole or any part of duty of excise if satisfied it is necessary in public interest. Court held this power extends to exempting surcharges that are levied on the exempted duty. Another 2 judgments on this section are set out below, all of them from the Supreme Court. They run from 2017 to 2022.

How do I find court cases under Section 5A 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 5A, section 5A Central Excise Act 1944, section 5A of the Central Excise Act. People searching for it also type section 5a of central excise act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 3 reported judgments on this section are set out on this page, beginning with Ambika Interntional vs Commissioner of Central Excise Central Excise (10 Nov 2017).

What should I read with Section 5A 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), so none of them can safely be read on its own. 8 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there are 5: most recently Notification No. 1/2016 – Infrastructure Cess (2016), then Notification No. 2/2016 - Infrastructure Cess (2016), and 3 more.

When did Section 5A of the Central Excise Act come into force?

Section 5A of the Central Excise Act, cited as Central Excise Act 1944 5A, 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

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.