Excise duty on capacity basis: notified goods taxed by deemed annual production or production factor, with prescribed assessment and abatement. Central Government may notify specified excisable goods for capacity-based excise charging; rules may require determination of annual capacity by an Assistant Commissioner or define production factors and deemed quantities per factor, with proportionate adjustments for part-year operation or changes in factors. Duty is levied per unit of deemed production or per production factor at notified rates and collected as prescribed; abatement is available for continuous non-production subject to conditions. The section excludes goods of hundred per cent export-oriented undertakings and treats such duty as leviable under the applicable tariff schedule; 'factor' may include multiple factors.