January 08, 2002

    The Cabinet has approved the proposal of the Ministry of Finance to carry out an amendment in Section 3 of the Central Excise Tariff Act, 1985, so as to bring the enabling power to increase the rate of excise duty on a commodity by a notification at par with the enabling power under Section 8A of the Customs Tariff Act, 1975. At present Section 3 of the Central Excise Tariff Act allows the Government to increase the excise duty on a commodity to not more than two times the existing rate whereas there is no such stipulation in the Customs Tariff Act. The amendment is only by way of carrying out an enabling provision. Any speculation that the Government will use these powers to increase excise duty on commodities for financing defence related expenditure is totally incorrect.