TaxTMI 
TaxTMI 
Classification of Excisable Goods
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....e step process is (a) Correctly classify the goods (b) Correctly determine the rate of duty. (c) Find its assessable value. Central Excise Tariff in India follows the principles of HSN (Harmonized System of Nomenclature) for classification of goods. Schedule one of the Central Excise Tariff Act, 1985 has been divided into 21 sections and 98 chapters. It consist eight digit classification. Generally the system of classification is such that it begins with raw material and ends with finished product. CETA Versus CEA - Central Excise Act (CEA) and Central Excise Tariff Act (CETA) are linked together as follows - (a) Section 2 of CETA states that rate at which duties of excise shall be levied under CEA are as specified in schedule to....
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....ss. Chapter Notes - Chapter Notes are given at the beginning of each Chapter, which govern entries in that Chapter. Rules for Interpretation of CETA - Rule 1 General The titles of Sections, Chapters and Sub-Chapters are provided for ease of reference only. Overriding effect of section notes and chapter notes For legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions. Rule 2(a) Incomplete or unfinished goods / assembled or disassembled goods Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfin....
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....r partly of such material or substance. Rule 3 When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: Rule 3(a) Specific description is preferable over general description the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise descrip....
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....al Cases / containers camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and presented with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This rule does not, however, apply to containers which give the whole its essential character; Rule 5(b) Packing Material / Containers (Repetitive use material) subject to the provisions of (a) above, packing materials and packing containers presented with the goods therein shall be classified with the goods if they are of a kind normally used for packing such g....
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.... relation to the rate of duty indicates that duty on the goods to which the entry relates shall be charged on the basis of the value of the goods fixed, defined or deemed to be, as the case may be, under or in subsection (2) read with sub-section (3) of section 3 or section 4 or section 4A of the Central Excise Act, 1944, the duty being equal to such percentage of the value as is indicated in that column. Additional Notes In this Schedule,— (1) (a) "heading", in respect of goods, means a description in list of tariff provisions accompanied by a four-digit number and includes all sub-headings of tariff items the first four-digits of which correspond to that number; (b) "sub-heading", in respect of goods, means a description in the list....