Excisable Goods means goods specified in the schedule to the Central Tariff Act, 1985 as being subject to a duty of excise. The basic conditions to be satisfied by any goods to be called excisable goods are:-

• The goods must be movable.

• The goods must be marketable ie saleable in the market as such goods. Actual sale of goods in the market is not necessary because excise duty is chargeable on manufacture and not on sales.

• The goods must be specified in the Central Excise Tariff Act

Factory means any premises including the precincts thereof, wherein excisable goods other than salt are manufactured or wherein any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on.

Manufacture includes any process:-

• Incidental or ancillary to the completion of a manufactured product; and

• Which is specified in relation to any goods in the section or Chapter note of the Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture and the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labor in the production of manufacture of excisable goods but also any person who engages in their production and manufacture on his own account such as on contract basis or job work basis.

Once manufacture of goods is complete, excise duty is payable, whether the goods are sold or self-consumed. Excise duty does not depend on the end use of the goods.

Sometimes, a particular process may not actually amount to manufacture but if it has been specified that it amounts to manufacture in the Schedule to the CETA, it will be deemed to be manufacture and all the provisions applicable to manufacture will apply to such process. Like repackaging of goods from bulk packing to small packing units does not normally amount to manufacture. However under note 3 - chapter 21, repackaging from bulk packing to retail pack of pan masala will amount to manufacture on which excise duty has to be paid