REGISTERED NO. DL—(N)04/0007/2003—25

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EXTRAORDINARY

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PART II — Section 1

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PUBLISHED BY AUTHORITY

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No. 59]

NEW DELHI, TUESDAY, DECEMBER 16, 2025/AGRAHAYANA 25, 1947 (Saka)

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Separate paging is given to this Part in order that it may be filed as a separate compilation.

MINISTRY OF LAW AND JUSTICE

(Legislative Department)

New Delhi, the 16th December, 2025/Agrahayana 25, 1947 (Saka)

The following Act of Parliament received the assent of the President on the

15th December, 2025 and is hereby published for general information:—

THE HEALTH SECURITY SE NATIONAL SECURITY CESS

ACT, 2025

No. 35 of 2025

[15th December, 2025.]

BE it enacted by Parliament in the Seventy-sixth Year of the Republic of India

as follows:––

CHAPTER I

PRELIMINARY

1. (1) This Act may be called the Health Security se National Security Cess

Act, 2025.

(2) It shall come into force on such date as the Central Government may, by

notification in the Official Gazette, appoint.

Short title and

commencement.

An Act to augment the resources for meeting expenditure on

national security and for public health, and to levey a cess

for the said purposes on the machines installed or other

processes undertaken by which specified goods are manufactured or

produced and for matters connected therewith or incidental thereto.

सी.जी.-डी.एल.-अ.-16122025-268562

CG-DL-E-16122025-268562

THE GAZETTE OF INDIA EXTRAORDINARY

[Part II—

Definitions.

2. In this Act, unless the context otherwise requires,––

(a) “adjudicating authority” means the concerned proper officer

appointed or authorised under the respective provisions to pass orders under

this Act after adjudication, but does not include the Board, the revisional

authority and the appellate authority;

(b) “appellate authority” means an authority appointed or authorised to

hear appeals under section 29;

Appellate Tribunal constituted under section 129 of the Customs Act, 1962;

(d) “Board” means the Central Board of Indirect Taxes and Customs

constituted under section 3 of the Central Boards of Revenue Act, 1963;

(e) “cess” means the Health Security se National Security Cess levied

under section 4;

(f) “factory” means any premises, including the precincts thereof,

wherein or in any part of which––

(i) the specified goods are manufactured; or

(ii) any manufacturing process connected with the production of

the specified goods are being carried on or is ordinarily carried on;

(g) “machine” for the purposes of manufacture or production of the

specified goods includes all types of Form, Fill and Seal Machines and Profile

Pouch Making Machines, by whatever name called, whether vertical or

horizontal, with or without collar, single track or multi-track, and any other

type of packing machine used for packing of the specified goods in pouches,

tins or other containers;

(h) “manufacture” includes—

(i) any process incidental or ancillary to the completion of the

specified goods; and

(ii) the process of packing or repacking of such goods in a pouch

or tin or other container or labelling or re-labelling thereof including the

declaration or alteration of retail sale price on it or adoption of any

other treatment on the goods to render the specified goods marketable to

the consumer,

whether or not such process is the only process undertaken;

(i) “notification” means a notification published in the Gazette of India

and the expression “notify” with its grammatical variation and cognate

expressions shall be construed accordingly;

(j) “pan masala” means goods falling under tariff item 2106 90 20 of the

First Schedule to the Customs Tariff Act, 1975;

(k) “prescribed” means prescribed by rules made under this Act;

(l) “proper officer” means any officer of the Central Government

entrusted with such powers or assigned with specific functions under the

provisions of this Act by the Board;

(m) “process” means any manual, mechanical, electrical, electronic,

automated or hybrid operation, or any other activity by which the specified

goods are manufactured or produced, whether wholly or in part;

(n) “revisional authority” means an authority appointed or authorised

under section 28 for revision of an order of the adjudicating authority;

52 of 1962.

54 of 1963.

51 of 1975.

Sec. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

(o) “Schedule” means a Schedule annexed to this Act;

(p) “specified goods” means the goods as specified in Schedule I to this

Act or such other goods as the Central Government may, by notification,

specify;

(q) “State” includes a Union territory with Legislature;

(r) “taxable person” shall mean a person referred to in section 3; and

(s) “weight” means the maximum weight of the specified goods that is

capable of being packaged in each pouch, tin or other container by the relevant

machine or process.

CHAPTER II

TAXABLE PERSON

3. (1) For the purposes of this Act, “taxable person” means any person who

owns, possesses, operates, manages, or is otherwise in control of the machine or

undertakes any process by which specified goods are manufactured or produced,

whether directly or through job-workers, employees, hired labour, or through any

other person acting on his behalf under any arrangement.

(2) A person shall be treated as a taxable person under this section irrespective

of whether he has opted for, or is availing of, any composition scheme, concessional

levy, or any other alternate scheme of taxation applicable to the specified goods,

under any law for the time being in force.

(3) For the purposes of this section,—

(a) the ownership, possession, or control over the machine or processes

shall be sufficient to constitute a person as a taxable person, irrespective of the

actual quantity manufactured;

(b) where a machine or process, is owned, possessed, leased, hired or

otherwise placed at the disposal of one or more persons manufacturing or

producing the specified goods, every such person shall be regarded as a

taxable person; and

divided into stages or processes carried out by different persons, such person

undertaking the final process that results in the completion or rendering of the

specified goods marketable, shall be deemed to be the taxable person.

CHAPTER III

HEALTH SECURITY SE NATIONAL SECURITY CESS

4. (1) There shall be levied and collected a cess, to be called Health Security

se National Security Cess, from every taxable person, on the machines installed or

other processes undertaken by him for the manufacture or production of the

specified goods referred to in Schedule I, at the amount specified in Schedule II and

computed in the manner provided in section 5.

(2) The cess leviable under sub-section (1) shall be in addition to any other duties

or taxes chargeable on the specified goods under any law for the time being in force.

(3) If the Central Government is satisfied that it is necessary in the public

interest so to do, it may, by notification, exempt any taxable person or a class of

taxable persons, unconditionally or subject to such conditions, from the whole or

any part of the cess leviable under this section for such period as may be specified

in the said notification.

Taxable person.

Levy and

collection of

cess.

THE GAZETTE OF INDIA EXTRAORDINARY

[Part II—

Manner of

computation of

cess.

Power of

Central

Government to

increase amount

of cess in

special

circumstances.

Purpose of levy

of cess.

5. (1) The cess referred to in section 4 shall be computed in accordance with

the provisions of this section based on the relevant process, speed of the machine or

capacity of other processes and the weight of the specified goods packed in pouch,

tin or other container, as the case may be, as declared by the taxable person and,

where applicable, as verified or calibrated by the proper officer under section 9, and

on the amount specified in Schedule II for such combination of process, speed or

capacity and weight.

(2) Where the specified goods are manufactured or produced wholly or partly with

the aid of a machine, the cess shall be levied and collected from the taxable person—

(a) with reference to the maximum rated speed of the machine measured

in number of pouches, tins or containers per minute;

(b) for the corresponding weight of the specified goods packed in a

pouch, tin or container;

Schedule II against such rated speed and weight provided therein.

(3) The cess payable under section 4 shall be the aggregate of cess calculated

under sub-section (2) for each of the machines installed in a factory of the taxable

person and where such taxable person owns, possesses, leases or otherwise controls

machines installed in more than one factory, the cess shall be computed separately

for each such factory.

(4) Where the specified goods are manufactured or produced by a taxable person

wholly by manual process without the aid of a machine, the cess shall be levied and

collected from the taxable person for each factory at the monthly amount specified in

column (4) in Table 2 of Schedule II, irrespective of the capacity of such manual process

or the weight of the specified goods packed in a pouch, tin or container.

(5) For the purposes of sub-section (4), a taxable person shall be deemed to be

engaged in the manufacture or production of the specified goods wholly by manual

process without the aid of a machine only where no machine capable of performing,

assisting, or completing any part of the process of manufacture or production of the

specified goods is installed in the factory of the taxable person.

(6) The cess determined under sub-section (2) or sub-section (4) shall be

payable for each month or part thereof and shall be subject to such abatement or

other conditions, as may be prescribed.

(7) Where any machine or manual process unit remains inoperative for a

continuous period of fifteen days or more, the cess computed under this section

shall, subject to such conditions, as may be prescribed, be abated proportionately

for the period of such non-operation.

6. (1) Where the Central Government is satisfied that it is necessary in the

public interest so to do, it may, by notification, direct in respect of such specified

goods that the amount of cess specified in column (4) in Table 1 of Schedule II and

in column (4) in Table 2 of the said Schedule, shall be increased to such amount,

not exceeding twice the amount so specified, for such period as may be specified in

the notification.

(2) The provisions of this Act shall apply to the cess, as increased under this

section, as they apply to the cess specified in Schedule II.

7. (1) The cess shall be levied for the purposes of meeting expenditure on the

national security of India and for public health.

(2) The proceeds of the cess levied under section 4 shall first be credited to the

Consolidated Fund of India and the Central Government may, after due appropriation

made by Parliament by law in this behalf, utilise such sums of money of the cess for

the purposes specified in sub-section (1), as it may consider necessary.

Sec. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

(3) For the purposes of utilisation of the cess, the Central Government may

specify such activities, schemes and programmes for national security or, as the case

may be, for public health, as may be prescribed.

CHAPTER IV

REGISTRATION AND RETURNS

8. (1) Every taxable person who owns, possesses, leases or otherwise controls

a machine installed or a process undertaken in a factory, shall register himself with

the jurisdictional proper officer in such manner as may be prescribed.

(2) The proper officer may, either on his own motion or on an application filed

by the registered person, or by his legal heirs in case of death of such person, cancel

the registration, in such manner and within such period, as may be prescribed,

having regard to the circumstances where,—

(a) the business has been discontinued, or transferred fully for any

reason including death of the proprietor, or amalgamated with other legal

entity, or demerged, or otherwise disposed of; or

(b) there is any change in the constitution of the business; or

(3) The proper officer may, after giving a reasonable opportunity of being heard,

cancel the registration of a taxable person from such date, as he may deem fit, where,—

(a) a registered person has contravened any of the provisions specified

in section 18; or

(b) a registered person has not furnished returns for six consecutive

calendar months; or

misstatement or suppression of facts.

(4) The cancellation of registration under sub-section (2) or sub-section (3)

shall not affect the liability of the person to pay cess and other dues under this Act

or to discharge any other obligation under this Act or the rules made thereunder, for

any period prior to the date of such cancellation, whether or not such cess and other

dues are determined before or after the date of the cancellation.

(5) Subject to such conditions as may be prescribed, any taxable person, whose

registration is cancelled by the proper officer on his own motion, may apply to such

officer for revocation of cancellation of the registration in such form and manner,

as may be prescribed, within a period of thirty days from the date of service of the

cancellation order and upon receiving such application, the proper officer may, in

such manner and within such period, as may be prescribed, and after giving a

reasonable opportunity of being heard, by order, either revoke the cancellation of

registration or reject the application.

9. (1) Every taxable person shall, in respect of machine installed or process

undertaken in such factory, furnish a self-declaration in such form, manner and

within such time, as may be prescribed, containing the particulars of the machines

installed or processes undertaken for the manufacture or production of the specified

goods, together with the parameters relevant for computation of the cess, including

the maximum rated speed, weight of packing, nature of packing and such other

technical or operational particulars, as may be prescribed.

(2) Where any parameter relevant for the computation of the cess undergoes

any change, the taxable person shall furnish a fresh self-declaration under

sub-section (1) within such time, form and manner, as may be prescribed.

Registration,

cancellation and

revocation.

Declaration to be

filed by taxable

person.

THE GAZETTE OF INDIA EXTRAORDINARY

[Part II—

Payment of cess

and returns.

Scrutiny and

assessments.

(3) In case of installation, addition or commencement of operation of any

machine or process, the taxable person shall furnish the self-declaration referred to in

sub-section (2) within fifteen days of such installation, addition or commencement.

(4) The declaration in sub-section (1) shall be subject to calibration,

verification and confirmation by the proper officer, with the approval of an officer

not below the rank of Joint Commissioner, in such form, manner and within such

time, as may be prescribed and the parameters so verified and confirmed shall be

considered for the computation of cess under section 5.

(5) No calibration, verification or confirmation under sub-section (4) shall be

made by the proper officer without giving the taxable person a reasonable

opportunity of being heard.

(6) Every taxable person shall comply with such oversight, monitoring or

verification mechanisms, whether technological, operational or audit-based, as may

be prescribed, to ensure the integrity and accuracy of reporting in relation to the

manufacture or production of the specified goods.

10. (1) The cess levied under section 4 shall be collected from every taxable

person at the beginning of each month, but not later than the 7th day of that month,

in such manner as may be prescribed.

(2) Every taxable person shall, for every calendar month or part thereof,

self-assess the cess payable under section 4 and furnish a return, in such form,

manner, within such time, and subject to such conditions and restrictions, as may be

prescribed.

(3) The Board may, for reasons to be recorded in writing, by notification,

extend the time limit for furnishing the returns under this section for such class of

taxable persons as may be specified therein.

(4) Where any taxable person, after furnishing a return under sub-section (2),

discovers any omission or incorrect particulars therein, other than as a result of any

action in this behalf by the proper officer, he shall rectify such omission or incorrect

particulars in such form and manner, as may be prescribed, subject to payment of

interest, if any, under this Act.

(5) Where a taxable person fails to furnish a return under sub-section (2), a

notice shall be issued by the proper officer requiring him to furnish such return

within fifteen days in such form and manner, as may be prescribed.

(6) No taxable person shall furnish a return for any calendar month after the

expiry of a period of two years from the due date for furnishing such return.

CHAPTER V

AUDIT AND ASSESSMENT

11. (1) The proper officer may scrutinise the return and related particulars

furnished by the registered taxable person to verify the correctness of the return and

inform him of the discrepancies noticed, if any, in such manner, as may be

prescribed, and seek his explanation thereto and in case––

(a) the explanation so given is found acceptable, the taxable person shall

be informed accordingly and no further action shall be taken in this regard;

(b) no satisfactory explanation is furnished within a period of thirty days

of being informed by the proper officer or such further period, as may be

permitted by him, or where the taxable person, after accepting the

discrepancies, fails to take the corrective measure in his return for the month

in which the discrepancy is accepted, the proper officer may initiate

appropriate action in accordance with the provisions of this Act.

Sec. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

5 of 1908.

(2) Where a taxable person fails to furnish the return under section 10, either

on his own motion or in response to a notice issued, the proper officer may proceed

to assess the liability of cess of the said person to the best of his judgement, taking

into account all the relevant material which is available or which he has gathered

and issue an assessment order within a period of five years from the end of the month

to which the cess not paid relates.

(3) Where a taxable person fails to obtain registration, or whose registration

has been cancelled but who was liable to pay cess, the proper officer may proceed

to assess the liability of the cess payable by such taxable person to the best of his

judgment for the relevant calendar month and issue an assessment order within a

period of five years from the end of the month to which the cess not paid relates.

(4) No assessment order shall be passed under sub-section (2) or

sub-section (3) by the proper officer without giving the taxable person a reasonable

opportunity of being heard.

12. (1) The proper officer not below the rank of a Commissioner or any other

officer authorised by him may, by way of a general or special order, undertake audit

of any registered taxable person for such period, at such frequency and in such

manner, as may be prescribed.

(2) The officers referred to in sub-section (1) may conduct audit in their office

or at the place of business of the registered taxable person.

(3) The registered taxable person shall be informed by way of a notice not less

than fifteen working days prior to the conduct of audit in such manner as may be

prescribed.

(4) The audit under sub-section (1) shall be completed within a period of three

months from the date of commencement of such audit.

(5) Where the proper officer referred to in sub-section (1) is satisfied that the

audit in respect of such registered taxable person cannot be completed within the

period of three months, he may, for the reasons to be recorded in writing, extend the

said period by a further period not exceeding six months.

(6) For the purposes of this sub-section, the expression, “commencement of

audit” shall mean the date on which the records and other documents called for by

the proper officer, are made available by the registered taxable person or the actual

institution of audit at the office of the proper officer or at the place of business of

such registered taxable person, whichever is later.

(7) During the course of audit, the proper officer may require the registered

taxable person—

(a) to afford him the necessary facility to verify the books of account or

other documents as he may require; and

(b) to furnish such information as he may require and render necessary

assistance for timely completion of the audit.

(8) On conclusion of audit, the proper officer shall, within thirty days, inform

the registered taxable person, whose records are audited, about the findings, his

rights and obligations and the reasons for such findings.

(9) Where the audit conducted under sub-section (1) results in detection of

cess not paid or short paid or erroneously refunded, the proper officer may initiate

action under section 16.

13. (1) The proper officer under this Act shall have power to summon any person

whose attendance he considers necessary, either to give evidence or to produce a

document or any other thing, in any inquiry in the same manner, as provided in the

case of a Civil Court under the provisions of the Code of Civil Procedure, 1908.

Audit.

Power to

summon persons

to give evidence

and produce

documents.

THE GAZETTE OF INDIA EXTRAORDINARY

[Part II—

Access to

business

premises.

Officers to assist

proper officers.

Determination of

cess not paid or

short paid or

erroneously

refunded.

(2) Every such inquiry referred to in sub-section (1) shall be deemed to be a

“judicial proceeding” within the meaning of section 193 and section 267 of the

Bharatiya Nyaya Sanhita, 2023.

14. (1) Any officer under this Act, authorised by the proper officer not below

the rank of a Joint Commissioner, shall have access to any place of business of a

taxable person to inspect books of account, documents, computers, computer

programs, computer software, whether installed in a computer or otherwise, and

such other things as he may require and which may be available at such place, for

the purposes of carrying out any audit, scrutiny, verification and checks, as may be

necessary to safeguard the interest of revenue.

(2) Every person in charge of the place referred to in sub-section (1) shall, on

demand, make available to the officer authorised under sub-section (1), or the audit

party deputed by the proper officer,—

(a) such records as prepared or maintained by the taxable person and

declared to the proper officer in such manner as may be prescribed;

(b) trial balance or its equivalent;

(d) cost audit report, if any, under section 148 of the Companies Act, 2013;

(e) the income-tax audit report, if any, under section 44AB of the

Income-tax Act, 1961; and

(f) any other relevant record, for the scrutiny by such officer or audit

party, within a period not exceeding fifteen working days from the day when

such demand is made, or such further period as may be allowed by the said

officer or the audit party.

15. (1) All officers of police, railways, customs and those officers engaged in

the collection of land revenue, including village officers, officers of the State

Governments and Union territory Administrations shall assist the proper officer in

the implementation of this Act.

(2) The Central Government may, by notification, empower and require any

other class of officers to assist the proper officers in the implementation of this Act

when called upon to do so.

16. (1) Where it appears to the proper officer that any cess has not been paid

or short paid or erroneously refunded, he shall serve notice on the taxable person

chargeable with cess which has not been so paid or which has been so short paid or

to whom the refund has erroneously been made due to any lapse on the part of the

taxable person, requiring him to show cause as to why he should not pay the amount

specified in the notice along with interest payable thereon under section 17 and a

penalty leviable under the provisions of this Act or the rules made thereunder.

(2) No notice under sub-section (1) shall be issued, if the cess which has not

been paid or short paid or erroneously refunded in a financial year is less than one

thousand rupees.

(3) The proper officer shall issue the notice under sub-section (1) within a

period of twenty-four months from the due date for furnishing of return for the

month to which the cess not paid or short paid relates to or within a period of

twenty-four months from the date of erroneous refund.

(4) Where a notice has been issued for any calendar month under

sub-section (1), the proper officer may serve a statement, containing the details of

cess not paid or short paid or erroneously refunded for such periods other than those

covered under the said sub-section, on the taxable person chargeable with cess.

45 of 2023.

18 of 2013.

43 of 1961.

Sec. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

(5) The service of the statement referred to in sub-section (4) shall be deemed

to be the service of notice on the taxable person under sub-section (1), subject to the

condition that the grounds relied upon for such month other than those covered

under sub-section (1) are the same as are mentioned in the earlier notice.

(6) In case of the cess which has not been paid or short paid or erroneously

refunded, the penalty––

(a) for any reason, other than the reason of fraud or any wilful

misstatement or suppression of facts to evade tax, shall be equivalent to ten

per cent. of the cess due from such taxable person or ten thousand rupees,

whichever is higher;

(b) for the reason of fraud or any wilful misstatement or suppression of

facts to evade cess, shall be equivalent to the cess due from such person.

(7) The proper officer shall, after considering the representation, if any, made

by the taxable person chargeable with cess, determine the amount of cess, interest

and penalty due from such person and issue an order within a period of twelve

months from the date of issuance of notice specified in sub-section (4).

(8) Where the proper officer referred to in sub-section (7) is not able to issue the

order within the period specified in the said sub-section, another proper officer, not

below the rank of Commissioner or an officer, not below the rank of a Joint

Commissioner, authorised by him, may, having regard to the reasons to be recorded in

writing for delay in issuance of the order under the said sub-section before the expiry of

the specified period, extend the said period for a further period not exceeding six months.

(9) Where any cess has not been paid or short paid or erroneously refunded,

other than the reason of fraud or any wilful misstatement or suppression of facts to

evade cess, the taxable person chargeable with cess may,––

(a) before service of notice under sub-section (1), pay the amount of cess

along with interest payable under section 17 of such cess on the basis of his own

ascertainment of such cess or the cess as ascertained by the proper officer and

inform the proper officer in writing of such payment, who shall, on receipt of

such information, not serve any notice under sub-section (1) or the statement

under sub-section (4), as the case may be, in respect of the cess so paid or any

penalty payable under the provisions of this Act or the rules made thereunder;

(b) pay the said cess along with interest payable under section 17 within

a period of sixty days from the date of receipt of show cause notice by him,

and on doing so, no penalty shall be payable and all proceedings in respect of

the said notice shall be deemed to be concluded.

(10) Where any cess has not been paid or short paid or erroneously refunded

by reason of fraud, or any wilful misstatement or suppression of facts to evade cess,

the taxable person chargeable with cess, may,––

(a) before service of notice under sub-section (1), pay the amount of cess

along with interest payable under section 17 and a penalty equivalent to fifteen

per cent. of such cess on the basis of his own ascertainment of such cess, or the

cess as ascertained by the proper officer, and inform the proper officer in writing

of such payment and the proper officer, on receipt of such information, shall not

serve any notice under the said sub-section, in respect of the cess so paid or any

penalty payable under the provisions of this Act or the rules made thereunder;

(b) pay the said cess along with interest payable under section 17 and a

penalty equivalent to twenty-five per cent. of such cess within a period of sixty

days from the date of receipt of the notice, and on doing so, all proceedings in

respect of the said notice shall be deemed to be concluded;

THE GAZETTE OF INDIA EXTRAORDINARY

[Part II—

Interest payable

on delay in

payment of

cess.

Penalty for

certain

contraventions.

a penalty equivalent to fifty per cent. of such cess within a period of sixty days

of the date of receipt of the order, and on doing so, all proceedings in respect

of the said notice shall be deemed to be concluded.

(11) Where the proper officer is of the opinion that the amount paid under

clause (a) of sub-section (9) or clause (a) of sub-section (10) falls short of the amount

actually payable, he shall proceed to issue the notice as provided for in sub-section (1)

in respect of such amount which falls short of the amount actually payable.

(12) Notwithstanding anything contained in clause (a) or clause (b) of

sub-section (9), the penalty under clause (a) of sub-section (6) shall be payable,

where any amount of self-assessed tax or any amount collected as cess has not been

paid within a period of thirty days from the due date of payment of such cess.

17. (1) Every person who is liable to pay cess in accordance with the

provisions of this Act or the rules made thereunder, but fails to pay the cess or any

part thereof to the Central Government within the specified period, shall, for the

period for which the cess or any part thereof remains unpaid, pay on his own, interest

at the rate of fifteen per cent. per annum.

(2) The interest under sub-section (1) shall be calculated, in such manner as may

be prescribed, from the day succeeding the day on which such tax was due to be paid.

CHAPTER VI

OFFENCES AND PENALTIES

18. (1) Where a taxable person who––

(a) owns, operates or in control of any machine or process for the

purpose of manufacture or production of the specified goods without declaring

to the proper officer under this Act; or

(b) fails to pay the cess levied under section 4 beyond a period of three

months from the date on which such payment becomes due under section 10; or

substitutes financial records or produces fake accounts or documents or

furnishes any false information or declaration or return with an intention to

evade payment of cess due under the said section; or

(d) fraudulently obtains refund of cess; or

(e) obstructs or prevents any officer in discharge of his duties under this

Act; or

(f) is liable to be registered under this Act but fails to obtain

registration; or

(g) fails to furnish information or documents called for by an officer in

accordance with the provisions of this Act or the rules made thereunder, or furnishes

false information or documents during any proceedings under this Act; or

(h) tampers with, or destroys any material evidence or document; or

(i) disposes of or tampers with any goods that have been seized under

this Act,

the proper officer may, after making such inquiry as he deems fit, impose on such

taxable person in addition to the cess leviable, a penalty of ten thousand rupees or

an amount equivalent to the cess payable or cess sought to be evaded, or the refund

claimed fraudulently, whichever is higher.

Sec. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

46 of 2023.

(2) Any person who aids or abets any of the contraventions specified in

clauses (a) to (i) of sub-section (1) shall be liable to a penalty which may extend to

one hundred thousand rupees.

(3) Any order imposing any such penalty shall be passed by the proper officer

only after giving the taxable person a reasonable opportunity of being heard.

19. (1) Whoever commits or causes to commit and retains any benefit arising

out of contraventions specified in clause (a) or clause (b) or clause (c) or clause (d)

of sub-section (1) of section 18 shall be punishable in cases where the amount of

cess evaded or the amount of refund wrongly taken—

(a) exceeds five hundred lakh rupees, with imprisonment for a term

which may extend to five years or with fine, or with both; or

(b) exceeds two hundred lakh rupees but does not exceed five hundred

lakh rupees, with imprisonment for a term which may extend to three years or

with fine, or with both; or

lakh rupees, with imprisonment for a term which may extend to one year or

with fine, or with both.

(2) Whoever commits or causes to commit and retains any benefit arising out of

contraventions specified in clause (f) or clause (i) of sub-section (1) of section 18, or

abets the commission of an offence specified in the said sub-section, shall be punishable

with imprisonment for a term which may extend to six months or with fine, or with both.

(3) Whoever, convicted for an offence under this section is again convicted

for an offence under this section, he shall be punishable for the second and for every

subsequent offence with imprisonment for a term which may extend to five years or

with fine, or with both.

(4) The Court may, for special and adequate reasons to be recorded in the

judgment, sentence any person to imprisonment under sub-section (1) or

sub-section (3), for a term less than six months.

(5) Notwithstanding anything contained in the Bharatiya Nagarik Suraksha

Sanhita, 2023, all offences under this Act, except the offences referred to in

sub-section (6) shall be non-cognizable and bailable.

(6) The offences specified in clause (a) or clause (b) or clause (c) or clause (d)

of sub-section (1) of section 18 shall be cognizable and non-bailable.

(7) No person shall be prosecuted for any offence under this section except with

the previous sanction of the proper officer, not below the rank of Commissioner.

20. (1) Where an offence committed by a person under this Act is a company,

every person who, at the time the offence was committed was in charge of, and was

responsible to, the company for the conduct of business of the company, as well as

the company, shall be deemed to be guilty of the offence and shall be liable to be

proceeded against and punished accordingly.

(2) Notwithstanding anything contained in sub-section (1), where an offence

under this Act has been committed by a company and it is proved that the offence has

been committed with the consent or connivance of, or is attributable to any negligence

on the part of, any director, manager, secretary or other officer of the company, such

director, manager, secretary or other officer shall also be deemed to be guilty of that

offence and shall be liable to be proceeded against and punished accordingly.

(3) Where an offence under this Act has been committed by a taxable person

being a partnership firm or a limited liability partnership or a Hindu undivided family

or a trust, the partner or karta or managing trustee shall be deemed to be guilty of that

offence and shall be liable to be proceeded against and punished accordingly and the

provisions of sub-section (2) shall, mutatis mutandis, apply to such persons.

Punishment for

certain

contraventions.

Offences by

companies.

THE GAZETTE OF INDIA EXTRAORDINARY

[Part II—

Cognizance of

offences.

Presumption of

culpable mental

state.

Compounding

of offences.

(4) Nothing contained in this section shall render any such person liable to any

punishment provided in this Act, if he proves that the offence was committed

without his knowledge or that he had exercised all due diligence to prevent the

commission of such offence.

Explanation.––For the purposes of this section,––

(a) “company” means a body corporate and includes a firm or other

association of individuals; and

(b) “director”, in relation to a firm, means a partner in the firm.

21. No Court shall take cognizance of any offence punishable under this Act

or the rules made thereunder except with the previous sanction of the proper officer,

not below the rank of Commissioner, and no court inferior to that of a Magistrate of

the first class, shall try any such offence.

22. In any prosecution for an offence under this Act which requires a culpable

mental state on the part of the accused, the Court shall presume the existence of such

mental state but it shall be a defence for the accused to prove the fact that he had no

such mental state with respect to the act charged as an offence in that prosecution.

Explanation.—For the purposes of this section,––

(a) the expression “culpable mental state” includes intention, motive,

knowledge of a fact, and belief in, or reason to believe, a fact;

(b) a fact is said to be proved only when the court believes it to exist

beyond reasonable doubt and not merely when its existence is established by

a preponderance of probability.

23. (1) Notwithstanding anything contained in the Bharatiya Nagarik Suraksha

Sanhita, 2023, any offence under this Act, not being an offence punishable with

imprisonment only, or with imprisonment and also with fine, may, either before or after

the institution of prosecution, be compounded by a proper officer, not below the rank of

Commissioner, on payment, by the person accused of the offence, to the Central

Government of such compounding amount in such manner as may be prescribed.

(2) The option of compounding shall not be available to a person—

(a) who has been allowed to compound once in respect of any of the

offences specified in clauses (a) to (f) of sub-section (1) of section 18 and the

offences which are relatable to the said specified offences;

(b) who has been allowed to compound once in respect of any offence, other

than those in clause (a), under this Act, the cess exceeding one crore rupees;

Act which is also an offence under any other law for the time being in force;

(d) a person who has been convicted for an offence under this Act by a

Court; and

(e) any other class of persons or offences, as may be prescribed.

(3) Any compounding shall be allowed only after making payment of cess,

interest and penalty involved in such offences and shall not affect the proceedings,

if any, instituted under any other law for the time being in force.

(4) The amount for compounding of offences under this section shall be such,

as may be prescribed, subject to the minimum amount not being less than ten

thousand rupees or fifty per cent. of the cess involved, whichever is higher, and the

maximum amount not being less than thirty thousand rupees or one hundred and

fifty per cent. of the cess, whichever is higher.

(5) On payment of such compounding amount as may be determined by the

proper officer, no further proceedings shall be initiated under this Act against the

accused person in respect of the same offence and any criminal proceedings, if

already initiated in respect of the said offence, shall stand abated.

46 of 2023.

Sec. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

CHAPTER VII

INSPECTION, SEARCH AND SEIZURE

24. (1) Where the proper officer, not below the rank of Joint Commissioner,

has reasons to believe that any taxable person is manufacturing or producing the

specified goods without complying with the provisions of this Act or the rules made

thereunder, he may authorise, in writing, any officer not below the rank of Assistant

Commissioner subordinate to him to inspect any places of business of the taxable

person or warehouse or godown, where the specified goods so manufactured or

produced are stored.

(2) Where the proper officer referred to in sub-section (1), either pursuant to

an inspection carried out under sub-section (1) or otherwise, has reasons to believe

that the specified goods or machines liable to confiscation or any documents or

books or things, which in his opinion, shall be useful for or relevant to any

proceedings under this Act, are secreted in any place, he may authorise, in writing,

any other proper officer to search and seize, or may himself search and seize such

goods, machines, documents or books or things.

(3) Where it is not practicable to seize any such goods or machine, the proper

officer, or any officer authorised by him, may serve on the owner or the custodian

of such goods an order that he shall not remove, part with, or otherwise deal with

such goods except with the previous permission of such officer.

(4) The documents or books or things so seized shall be retained by such

officer only for so long as may be necessary for their examination and for any

inquiry or proceedings under this Act.

(5) The documents, books or things referred to in sub-section (2) or any other

documents, books or things produced by a taxable person or any other person, which

have not been relied upon for the issue of notice under this Act or the rules made

thereunder, shall be returned to such person within a period not exceeding thirty

days of the issue of the said notice.

(6) The officer authorised under sub-section (2) shall have the power to seal

or break open the door of any factory or to break open any almirah, electronic

device, box, receptacle in which the specified goods, accounts, registers or

documents of the person are suspected to be concealed, where access to such factory,

almirah, electronic devices, box or receptacle is denied.

(7) The person from whose custody any documents are seized under

sub-section (2) shall be entitled to make copies thereof or take extracts therefrom in

the presence of an authorised officer at such place and time as such officer may

indicate in this behalf except where making such copies or taking such extracts may,

in the opinion of the proper officer, prejudicially affect the investigation.

(8) The goods or machines so seized under sub-section (2) shall be released,

on a provisional basis, upon execution of a bond and furnishing of a security, in such

manner and of such quantum, respectively, as may be prescribed, or on payment of

applicable cess, interest and penalty payable, as the case may be.

(9) Where any goods or machines are seized under sub-section (2) and no

notice in respect thereof is given within six months of the seizure of such goods,

such goods shall be returned to the person from whose possession they were seized.

(10) The period of six months specified in sub-section (7) may, on sufficient

cause being shown, be extended by the proper officer for a further period not

exceeding six months.

Power of

inspection,

search and

seizure.

THE GAZETTE OF INDIA EXTRAORDINARY

[Part II—

Confiscation of

specified goods

or machines.

(11) The proper officer may, with the prior permission of the Board, having

regard to the perishable nature of the specified goods, depreciation in its value or

machines with the passage of time, constraints of storage space for such goods or

machines or any other relevant considerations, may, as soon as may be after its

seizure under sub-section (2), dispose of such goods or machines in such manner as

may be prescribed.

(12) Where the specified goods or machines, being items specified under

sub-section (11), have been seized by a proper officer, or any officer authorised by

him under sub-section (2), he shall prepare an inventory of such goods or machines

in such manner as may be prescribed.

(13) The provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, relating

to search and seizure, shall, so far as may be, apply to search and seizure under this

section subject to the modification that sub-section (5) of section 185 of the said

Sanhita shall have effect as if for the word “Magistrate”, wherever it occurs, the

word “Commissioner” were substituted.

(14) Where the proper officer has reasons to believe that any person has

evaded or is attempting to evade the payment of any cess, he may, for reasons to be

recorded in writing, seize the accounts, registers or documents of such person

produced before him and shall grant a receipt for the same, and shall retain the same

for so long as may be necessary in connection with any proceedings under this Act

or the rules made thereunder for prosecution.

25. (1) Where any taxable person––

(a) owns, operates or controls any machine installed or undertakes any

process for the manufacture or production of the specified goods in

contravention of any of the provisions of this Act or the rules made thereunder

with intent to evade payment of cess; or

(b) contravenes any of the provisions of this Act or the rules made

thereunder with intent to evade payment of cess; or

then, all such goods or machines shall be liable to confiscation and the person shall

be liable to penalty under section 18.

(2) Whenever confiscation of any such goods or machines are authorised by

this Act, the officer adjudging it shall give to the owner of such goods or machines

an option to pay in lieu of confiscation, such penalty as specified under

sub-section (3) as the said officer thinks fit.

(3) The penalty leviable under sub-section (2) shall not exceed the market

value of the specified goods or the machines confiscated, less the cess chargeable

thereon.

(4) The aggregate of penalty under sub-section (2) and penalty leviable shall

not be less than the penalty equal to two hundred per cent. of the cess payable on

such goods.

(5) No order for confiscation of the specified goods or machines for imposition

of penalty shall be issued without giving the person a reasonable opportunity of

being heard.

(6) Where the specified goods or machines are confiscated under this Act, the

title of such goods or machines shall thereupon vest in the Central Government.

(7) The proper officer who confiscates any goods or machine under this

section shall take and hold possession of the things confiscated and every officer of

police, on the requisition of such proper officer, shall assist him in taking and

holding such possession.

46 of 2023.

Sec. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

46 of 2023.

(8) The proper officer may, after satisfying himself that the confiscated goods

or machines are not required in any other proceedings under this Act and after giving

reasonable time not exceeding a period of three months to pay the fine in lieu of

such confiscation, dispose of such goods or conveyance and deposit the sale

proceeds thereof with the Central Government.

26. (1) Where a proper officer, not below the rank of Commissioner, has

reasons to believe that a person has committed any offence specified in clause (a)

or clause (b) or clause (c) or clause (d) of sub-section (1) of section 18 which is

punishable under the said sub-section or sub-section (3) of the said section, he may,

by order, authorise any other proper officer below him to arrest such person.

(2) Where a person is arrested under sub-section (1) for an offence specified

under sub-section (5) of section 19, the officer authorised to arrest the person shall

inform such person of the grounds of arrest and produce him before a Magistrate

within twenty-four hours.

(3)

Subject to the provisions of the Bharatiya Nagarik Suraksha

Sanhita, 2023,––

(a) where a person is arrested under sub-section (1) for any offence

specified under sub-section (5) of section 19, he shall be admitted to bail or in

default of bail, be forwarded to the custody of the Magistrate;

(b) in the case of a non-cognizable and bailable offence, the proper

officer not below the rank of Assistant Commissioner shall, for the purpose of

releasing an arrested person on bail or otherwise, have the same powers and

be subject to the same provisions as an officer-in-charge of a police station.

27. (1) Any amount due under this Act (including any interest or penalty) from

any taxable person may be recovered in the same manner as an arrear of land

revenue.

(2) All officers of police, central tax and customs and all officers of the Central

Government and the State Government engaged in the collection of land revenue,

and all village officers are hereby empowered and required to assist the proper

officer in the execution of this Act.

CHAPTER VIII

REVISION AND APPEALS

28. (1) The revisional authority, not below the rank of a Commissioner,

authorised in this behalf, by an order of the Board, may, on his own motion, or upon

information received by him, call for and examine the record of any proceedings,

and if he considers that any order passed under this Act by any officer subordinate

to him is erroneous in so far as it is prejudicial to the interest of revenue, or is illegal

or improper, or has not taken into account certain material facts, whether available

at the time of issuance of the said order or not, or in consequence of an observation

by the Comptroller and Auditor-General of India, he may, if necessary, stay the

operation of such order for such period as he deems fit and after giving the person

concerned an opportunity of being heard and after making such further inquiry as

may be necessary, pass such order, as he thinks just and proper, including enhancing

or modifying or annulling the said order.

(2)

The revisional authority shall not exercise any power under

sub-section (1), if––

(a) the order has been subject to an appeal under section 29 or

section 30; or

Power to arrest.

Recovery of

amount due and

assistance of

officers.

Revision.

THE GAZETTE OF INDIA EXTRAORDINARY

[Part II—

Appeals to

appellate

authority.

(b) the period specified under sub-section (1) of section 29 has not yet

expired or more than two years have expired after the passing of the order

sought to be revised; or

an earlier stage; or

(d) the order was passed in exercise of the powers under sub-section (1).

(3) The revisional authority may pass an order under sub-section (1) on any

point which has not been raised and decided in an appeal referred to in clause (a) of

sub-section (2), before the expiry of a period of one year from the date of the order

in such appeal or before the expiry of a period of two years referred to in clause (b)

of that sub-section, whichever is later.

(4) Every order passed in a revision under sub-section (1) shall, subject to the

provisions of section 30 or section 32 or section 33, be final and binding on the

parties.

(5) If the order subject to revision under sub-section (1) involves an issue on

which the Appellate Tribunal or the High Court has given its decision in some other

proceedings and an appeal to the High Court or the Supreme Court against such

decision of the Appellate Tribunal or the High Court is pending, the period spent

between the date of the decision of the Appellate Tribunal and the date of the

decision of the High Court, or the date of the decision of the High Court and the

date of the decision of the Supreme Court, shall be excluded in computing the period

of limitation referred to in clause (b) of sub-section (2) where proceedings for

revision have been initiated by way of issue of a notice under this section.

(6) Where the issuance of an order under sub-section (1) is stayed by the order

of a Court or Appellate Tribunal, the period of such stay shall be excluded in

computing the period of limitation referred to in clause (b) of sub-section (2).

(7) For the purposes of this section, the expression “record” shall include all

records relating to any proceedings under this Act available at the time of

examination by the revisional authority.

29. (1) Any taxable person aggrieved by any order of the adjudicating

authority may, within a period of three months from the date of receipt of the order

appealed against by such person, appeal to such appellate authority, not below the

rank of a Commissioner, authorised in this behalf, by an order of the Board, in such

form and manner, as may be prescribed.

(2) The proper officer, not below the rank of Commissioner, may on his own

motion, call for and examine the record of any proceedings in which an adjudicating

authority has passed any order under this Act, for the purpose of satisfying himself

as to the legality or propriety of the such order and may, by order, direct any officer

subordinate to him to apply to the appellate authority within six months from the

date of communication of the order of the adjudicating authority for the

determination of such points arising out of the said decision or order as may be

specified by such proper officer in his order.

(3) Where, in pursuance of an order under sub-section (2), the authorised

officer makes an application to the appellate authority, such application shall be

dealt with by the appellate authority as if it were an appeal made against the decision

or order of the adjudicating authority and such authorised officer were an appellant

and the provisions of this Act relating to appeals shall apply to such application.

(4) Every appeal under this section shall be verified in such manner, as may

be prescribed.

Sec. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

(5) No appeal shall be filed under sub-section (1), unless the appellant has

paid—

(a) in full, such part of the amount of cess, interest, fine, fee and penalty

arising from the impugned order, as is admitted by him; and

(b) a sum equal to ten per cent. of the remaining amount of cess in

dispute arising from the said order, subject to a maximum of twenty-five crore

rupees, in relation to which the appeal has been filed.

(6) Where the appellant has paid the amount under sub-section (5), the

recovery proceedings for the balance amount shall be deemed to be stayed.

(7) The appellate authority shall give the appellant a reasonable opportunity

of being heard.

(8) The appellate authority may, if sufficient cause is shown at any stage of

hearing of an appeal, grant time to the parties or any of them and adjourn the hearing

of the appeal for reasons to be recorded in writing.

(9) After the receipt of any appeal under this section, the appellate authority

shall, after giving the appellant a reasonable opportunity of being heard in the matter

and after making such further inquiry as may be necessary, pass such order, as he

thinks just and proper, confirming, modifying or annulling the order appealed

against but shall not refer the case back to the adjudicating authority that passed the

said order.

(10) The order of the appellate authority disposing of the appeal shall be in

writing and shall state the points for determination, the decision thereon and the

reasons for such decision.

(11) The appellate authority shall, where it is possible to do so, hear and decide

every appeal within a period of six months from the date on which it is filed.

30. (1) Any person aggrieved by an order of the appellate authority or

revisional authority, may appeal to the Appellate Tribunal against such order in such

form and manner, as may be prescribed, within a period of three months from the

date of receipt of such order sought to be appealed against by him or by the proper

officer, or, as the case may be.

(2) The Appellate Tribunal may, after giving the parties to the appeal an

opportunity of being heard, pass such orders thereon as it thinks fit, confirming,

modifying or annulling the order appealed against, or may refer the case back to the

proper officer who passed such order with such directions as it may think fit, for a

fresh adjudication, after taking additional evidence, if necessary.

(3) The Appellate Tribunal may, at any time within a period of six months

from the date of such order, with a view to rectify any mistake or error apparent on

the face of the record or for any other sufficient reason, amend any order passed by

it under sub-section (1) and shall make such amendments if the mistake is brought

to its notice by the proper officer or the other party to the appeal.

(4) An amendment made under sub-section (3) which has the effect of

enhancing an assessment or reducing a refund, or otherwise increasing the liability

of the other party, shall not be made under this sub-section, unless the Appellate

Tribunal has given notice to him of its intention to do so and has allowed him a

reasonable opportunity of being heard.

(5) The Appellate Tribunal shall, where it is possible to do so, hear and decide

every appeal within a period of three years from the date on which such appeal is

filed.

Appeals to

Appellate

Tribunal.

THE GAZETTE OF INDIA EXTRAORDINARY

[Part II—

Appearance by

authorised

representative.

Appeal to High

Court.

(6) The Appellate Tribunal shall send a copy of every order passed under this

section to the proper officer and the other party to the appeal.

(7) The provisions of sub-sections (1), (2), (5) and (6) of section 129C of the

Customs Act, 1962, shall apply to the Appellate Tribunal in the discharge of its

functions under this Act as they apply to it in the discharge of its functions under

the Customs Act, 1962.

(8) The President or any other member of the Appellate Tribunal authorised

in this behalf by the President may, sitting singly, dispose of any case which has

been allotted to the Bench of which he is a member, where the amount of cess or

fine or penalty involved, does not exceed fifty lakh rupees.

31. (1) Any person who is entitled or required to appear before an adjudicating

authority or a revisional authority or the Appellate Tribunal in connection with any

proceedings under this Act, otherwise than when required under this Act to appear

personally for examination on oath or affirmation, may, subject to the other

provisions of this section, appear by an authorised representative.

(2) For the purposes of this section, “authorised representative” means a

person authorised by the person referred to in sub-section (1) to appear on his behalf,

being—

(a) his relative or regular employee; or

(b) any legal practitioner who is entitled to practise in any Civil Court in

India; or

prescribed, for this purpose.

32. (1) Any person aggrieved by an order passed by the Appellate Tribunal

may file an appeal to the High Court and the High Court may admit such appeal, if

it is satisfied that the case involves a substantial question of law.

(2) An appeal under sub-section (1) shall be filed within a period of one

hundred and eighty days from the date of receipt of the order appealed against by

the aggrieved person and it shall be in such form and verified in such manner, as

may be prescribed.

(3) Irrespective of sub-section (2), the High Court may entertain an appeal

after the expiry of the period specified in the said sub-section, if it is satisfied that

there was sufficient cause for not filing the appeal within such period.

(4) Where the High Court is satisfied that a substantial question of law is

involved in any case, it shall formulate that question and the appeal shall be heard

only on the question so formulated, and the respondents shall, at the hearing of the

appeal, be allowed to argue that the case does not involve such question.

(5) The High Court may, for reasons to be recorded in writing, hear the appeal

on any other substantial question of law not formulated by it, if it is satisfied that

the case involves such question.

(6) The High Court shall decide the question of law so formulated and deliver

such judgment thereon containing the grounds on which such decision is founded

and may award such cost as it deems fit.

(7) The High Court may determine any issue, which––

(a) has not been determined by the Appellate Tribunal; or

(b) has been wrongly determined by the Appellate Tribunal, by reason

of a decision on such question of law referred to in sub-section (4).

52 of 1962.

Sec. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

5 of 1908.

(8) Where an appeal has been filed before the High Court, it shall be heard by

a Bench of not less than two Judges of the High Court, and shall be decided in

accordance with the opinion of such Judges or of the majority, if any, of such Judges.

(9) Where the High Court delivers a judgment in an appeal filed before it under

this section, effect shall be given to such judgment by either side on the basis of a

certified copy of the judgment.

(10) Save as otherwise provided in this Act, the provisions of the Code of Civil

Procedure, 1908, relating to appeals to the High Court shall, as far as may be, apply

in the case of appeals under this section.

33. (1) An appeal shall lie to the Supreme Court—

(a) from any order passed by the High Court; or

(b) from any judgment or order passed by the High Court in an appeal

made under section 32 in any case which, on its own motion or on an

application made by or on behalf of the party aggrieved, immediately after

passing of the judgment or order, the High Court certifies to be a fit one for

appeal to the Supreme Court.

(2) The provisions of the Code of Civil Procedure, 1908, relating to appeals to

the Supreme Court shall, so far as may be, apply in the case of appeals under this

section as they apply in the case of appeals from decrees of a High Court.

(3) Where the judgment of the High Court is varied or reversed in the appeal,

effect shall be given to the order of the Supreme Court by either side on the basis of

a certified copy of the said order.

CHAPTER IX

MISCELLANEOUS

34. (1) The Central Government may, if it is of the opinion that it is expedient

or necessary in the public interest so to do, by notification, add to Schedule I any

goods and on any such notification being issued, the said Schedule shall be deemed

to be amended accordingly.

(2) Every notification issued under sub-section (1) shall, as soon as possible

after it is issued, be laid before each House of Parliament.

35. (1) The Central Government shall, by notification, make rules for carrying

out the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing

power, such rules may provide for all or any of the following matters, namely:––

(a) the abatement or other conditions subject to which the cess

determined shall be payable under sub-section (6) of section 5;

(b) the conditions subject to which the cess shall be abated due to

non-operation under sub-section (7) of section 5;

security or public health for which the cess may be utilised under

sub-section (3) of section 7;

(d) the form and manner of registration by a taxable person with the

jurisdictional proper officer under sub-section (1) of section 8;

(e) the manner and the period within which the proper officer may cancel

a registration under sub-section (2) of section 8;

Appeals to

Supreme Court.

Power of Central

Government to

amend

Schedule I.

Power to make

rules.

THE GAZETTE OF INDIA EXTRAORDINARY

[Part II—

(f) the form, manner and conditions subject to which taxable person may

apply for revocation of cancellation of registration and the manner and the

period within which the proper officer may decide upon the application for

revocation of cancellation of registration under sub-section (5) of section 8;

(g) the form, manner and period within which self-declaration shall be

furnished by the taxable person and the other technical or operational

particulars to be contained in the said declaration under sub-section (1) of

section 9;

(h) the period, form and manner for furnishing a revised declaration, for

any change in the relevant parameters, by the taxable person under

sub-section (2) of section 9;

(i) the form, manner and period within which the proper officer shall do

the calibration, verification or confirmation of the declaration filed by the

taxable person under sub-section (4) of section 9;

(j) the oversight, monitoring or verification mechanism to be complied

with by the taxable person under sub-section (6) of section 9;

(k) the manner for collection of cess from taxable person under

sub-section (1), and the form, manner, the period within which and the

conditions and restrictions subject to which return shall be furnished by the

taxable person under sub-section (2), of section 10;

(l) the form and manner of rectification of omission or incorrect

particulars filled in the return by a taxable person under sub-section (4) of

section 10;

(m) the form and manner of the notice issued by the proper officer to a

taxable person who fails to furnish the return within the specified time under

sub-section (5) of section 10;

(n) the manner of information to the taxable person of the discrepancies

noticed in his return by the proper officer under sub-section (1) of section 11;

(o) the period, frequency and manner of audit to be undertaken by the

proper officer under sub-section (1), and the manner in which the taxable

person shall be informed of the said audit under sub-section (3), of section 12;

(p) the manner of declaration of preparation or maintenance of records

to the proper officer by the taxable person under clause (a) of sub-section (2)

of section 14;

(q) the manner of calculation of interest under sub-section (2) of

section 17;

(r) the manner of compounding of offences by the proper officer under

sub-section (1), and the offences or class of persons to whom compounding

shall not be available under clause (e) of sub-section (2), of section 23;

(s) the amount for compounding of offences under sub-section (4) of

section 23;

(t) the manner and quantum for execution of bonds or furnishing of

security for release of seized goods or machines on provisional basis under

sub-section (8) of section 24;

(u) the manner of disposal of goods or machines seized by the proper

officer under sub-section (11), and the manner of preparation of inventory of

the seized goods under sub-section (12), of section 24;

Sec. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

(v) the form and manner of preferring appeal to the appellate authority

under sub-section (1), and the manner of verification of such appeal under

sub-section (4), of section 29;

(w) the form and manner of preferring appeal to the Appellate Tribunal

under sub-section (1) of section 30;

(x) the qualifications for a person for becoming an authorised

representative under clause (c) of sub-section (2) of section 31;

(y) the form for appeals preferred by the aggrieved person before the

High Court and the manner of verification of such appeal under

sub-section (2) of section 32;

(z) any other matter which is to be or in respect of which provision is to

be made, by rules for carrying out the provisions of this Act.

36. Every rule made and every notification issued under this Act shall be laid,

as soon as may be after it is made or issued, before each House of Parliament while

it is in session for a total period of thirty days which may be comprised in one session

or in two or more successive sessions, and if, before the expiry of the session

immediately following the session or the successive sessions aforesaid, both Houses

agree in making any modification in such rule or notification, or both Houses agree

that the rule should not be made or notification should not be issued, the rule or

notification shall thereafter have effect only in such modified form or be of no effect,

as the case may be; so, however, that any such modification or annulment shall be

without prejudice to the validity of anything previously done under that rule or

notification.

37. Where any rule, notification or order made or issued under this Act or any

notification or order issued under such rule, is amended, repealed, superseded or

rescinded, then, unless a different intention appears, such amendment, repeal,

supersession or rescinding shall not—

(a) revive anything not in force or existing at the time at which the

amendment, repeal, supersession or rescinding takes effect; or

(b) affect the previous operation of any rule, notification or order so

amended, repealed, superseded or rescinded or anything duly done or suffered

thereunder; or

incurred under any rule, notification or order so amended, repealed,

superseded or rescinded; or

(d) affect any penalty, forfeiture or punishment incurred in respect of

any offence committed under or in violation of any rule, notification or order

so amended, repealed, superseded or rescinded; or

(e) affect any investigation, legal proceeding or remedy in respect of any

such right, privilege, obligation, liability, penalty, forfeiture or punishment as

aforesaid,

and any such investigation, legal proceeding or remedy may be instituted, continued

or enforced and any such penalty, forfeiture or punishment may be imposed as if the

rule, notification or order, as the case may be, had not been amended, repealed,

superseded or rescinded.

38. (1) No suit, prosecution or other legal proceeding shall lie against the

Central Government or any officer of the Central Government for anything which

is in good faith done or intended to be done, in pursuance of this Act or any rule

made thereunder.

Laying before

Parliament.

Effect of

amendments,

etc., of rules,

notifications or

orders.

Protection of

action taken in

good faith.

THE GAZETTE OF INDIA EXTRAORDINARY

[Part II—

Power to remove

difficulties.

(2) No proceeding, other than a suit, shall be commenced against the Central

Government or any officer of the Central Government for anything done or

purported to have been done in pursuance of this Act or any rule made thereunder,

without giving the Central Government or such officer a month’s previous notice in

writing of the intended proceeding and of the cause thereof or after the expiration

of three months from the accrual of such cause.

39. (1) If any difficulty arises in giving effect to the provisions of this Act, the

Central Government may, by order published in the Official Gazette, make such

provisions, not inconsistent with the provisions of this Act, as appear to it to be

necessary or expedient for removing the difficulty.

(2) No order shall be made under this section after the expiry of five years

from the commencement of this Act.

(3) Every order made under this section shall, as soon as may be after it is

made, be laid before each House of Parliament.

Sec. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

SCHEDULE I

[See sections 2(o) and (p) and 4(1)]

Sl. No.

Chapter / Heading / Sub-heading / Tariff

item

Description of

Goods

(1)

(2)

(3)

2106 90 20

Pan masala

Any other goods which may be notified

Explanation.––

(1) In this Schedule, reference to a “tariff item”, “heading”, “sub-heading” and

“Chapter”, wherever they occur, shall mean respectively a tariff item, heading,

sub-heading and Chapter in the First Schedule to the Customs Tariff Act, 1975

(51 of 1975).

(2) The rules for the interpretation of the First Schedule to the Customs Tariff

Act, 1975 (51 of 1975), the section and Chapter Notes and the General Explanatory

Notes of the First Schedule shall, so far as may be, apply to the interpretation of this

Schedule.

THE GAZETTE OF INDIA EXTRAORDINARY

[Part II—

SCHEDULE II

[See sections 2(o), 4(1), 5 and 6]

TABLE 1

Applicable to wholly or partly machine-based process

Sl.

No.

Number of pouches or

tins or containers per

minute (Maximum rated

speed of machine)

Weight of the specified

goods per pouch or tin

or container

Amount of cess

per month per

machine

(rupees in lakhs)

(1)

(2)

(3)

(4)

Up to 500

Up to 2.5 grams

101.00

Above 2.5 grams but

below 10 grams

364.00

Above 10 grams

849.00

501 to 1000

Up to 2.5 grams

202.00

Above 2.5 grams but

below 10 grams

728.00

Above 10 grams

1698.00

1001 to 1500

Up to 2.5 grams

303.00

Above 2.5 grams but

below 10 grams

1092.00

Above 10 grams

2547

Above 1500

Up to 2.5 grams

101 x S/450

Above 2.5 grams but

below 10 grams

364 x S/450

Above 10 grams

849 x S/450

TABLE 2

Applicable to wholly manual process

Sl. No.

Speed or capacity

of process

Weight of the

specified goods

per pouch or tin

or container

Amount of cess

per month

(rupees in lakhs)

(1)

(2)

(3)

(4)

Any

Notes:

(1) For the purposes of this Schedule, in Table 1 in column (4) of the table

above, the term “S” represents maximum rated capacity of a machine.

Sec. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

(2) For the purposes of this Schedule, where a packing machine contains

multiple tracks or multiple packing lines and, in addition to packing the specified

goods in pouches, performs any supplementary processes such as moulding, shaping

or otherwise giving a definite form to the pouches for brand distinction or for

prevention of counterfeiting, two such tracks or lines shall be deemed to constitute

one individual packing machine for the purpose of calculating the cess liability.

(3) The number of packing machines to be taken into account for computation

of the cess specified in this Schedule shall be determined in accordance with the

rules prescribed by the Central Government.

———

UPLOADED BY THE MANAGER, GOVERNMENT OF INDIA PRESS, MINTO ROAD, NEW DELHI–110002

AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI–110054.

MGIPMRND—393GI(S4)—16-12-2025.

DR. RAJIV MANI,

Secretary to the Govt. of India.

KSHITIZ

MOHAN

Digitally signed by

KSHITIZ MOHAN

Date: 2025.12.16

22:25:23 +05'30'