Are Cigarettes covered u/s 4A of the CEA, 1944?
WE received this smoky mail from a netizen -
"Kindly take a look at the following extract from Chapter 24 of the CETA, 1985 as appearing on the CBEC website and many taxation journals and websites.
Tariff Item | Description of goods | Unit | Rate of duty | |
|---|---|---|---|---|
(1) | (2) | (3) | (4) | |
2402 20 | - | Cigarettes, containing tobacco : | ||
2402 20 10 | --- | Other than filter cigarettes, of length not exceeding 65 millimetres | Tu | Rs. 509 per thousand |
2402 20 20 | --- | Other than filter cigarettes, of length exceeding 65 millimetres but not exceeding 70 millimetres | Tu | Rs. 1772 per thousand |
2402 20 30 | --- | Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimetres or its actual length, whichever is more) not exceeding 65 millimetres | Tu | Rs. 509 per thousand |
2402 20 40 | --- | Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimetres or its actual length, whichever is more) exceeding 65 millimetres but not exceeding 70 millimetres | Tu | Rs. 1249 per thousand |
2402 20 50 | --- | Filter cigarettes of length (including the length of the filter, the length of filter being II millimetres or its actual length, whichever is more) exceeding 70 millimetres but not exceeding 75 millimetres | Tu | Rs. 1772 per thousand |
2402 20 60 | --- | Filter cigarettes of length (including the length of the filter, the length of filter being 11 miilimetres or its actual length, whichever is more) exceeding 75 millimetres but not exceeding 85 millimetres | Tu | Rs. 2390 per thousand |
2402 20 90 | --- | Other | Tu | Rs. 2875 per thousand |
It will be observed that Cigarettes of the length mentioned above are chargeable to specific rates of Central Excise duty.
If this be so, is there any need to declare "Cigarettes" in the Third Schedule of the Central Excise Tariff Act, 1985 as the goods mentioned in this Schedule are the ones which are notified for assessment based on the Retail Sale Price (MRP) in terms of Section 4A of the Central Excise Act, 1944.
But, are they declared in the Third Schedule? one may ask.
If you have any doubts, please take a look at the following extract from the Third Schedule -
S. No. | Heading, sub-heading or tariff item | Description of goods |
|---|---|---|
(1) | (2) | (3) |
26A. | 2402 20 10 to 2402 20 90 | All goods |
Furthermore, more proof lies through Notification 49/2008-CE(NT) dated 24/12/2008 as amended by notification 7/2012-CE(NT) dated 17/03/2012 which prescribes the following abatement factor for Cigarettes against Serial no. 26A -
TABLE
S.No | Chapter, heading, sub-heading or tariff item | Description of goods | Abatement as a percentage of retail sale price |
|---|---|---|---|
(1) | (2) | (3) | (4) |
26A. | 2402 | Cigarettes | 50% |
So, since Cigarettes are assessed to only SPECIFIC rates of duty, these entries mentioned in the Third Schedule and the Notification 49/2008-CE(NT) are NOT required and need to be expunged.
I feel that although it would be easy to remove the serial number 26A from the notification, removing it from the Third Schedule would require nothing less than an Amendment Act."
Can netizens share some light on why all these entries came into being in the first place?
For more on this "smoky" issue look out for the Breaking News tomorrow.