The M and TP Excise Duties Act 1955

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THE MEDICINAL AND TOILET PREPARATIONS (EXCISE DUTIES) ACT, 19551 
ACT NO. 16 OF 1955 
[27th April, 1955.]  
An Act to provide for the levy and collection of duties of excise on medicinal and toilet 
preparations containing alcohol, 2[narcotic drug or narcotic]. 
BE it enacted by Parliament in the Sixth Year of the Republic of India as follows:― 
PRELIMINARY 
1. Short title, extent and commencement .―(1) This Act may be called the Medicinal and Toilet 
Preparations (Excise Duties) Act, 1955. 
(2) It extends to the whole of India. 
(3) It shall come into force on such d ate3 as the Central Government may, by notification in  the 
Official Gazette, appoint. 
2. Definitions.―In this Act, unless the context otherwise requires,― 
(a) “alcohol” means ethyl alcohol of any strength and purity having the chemical composition C2 
H5 OH; 
4[(aa) “coca derivative” means— 
(i) crude cocaine, that is, any extract of coca leaf which can b e used, directly or indirectly for 
the manufacture of cocaine; 
(ii) ecgonine, that is, laevo -ecgonine having the chemical formula C 9 H15 NO3 H2 O, and all 
the derivatives of laevo-ecgonine from which it can be recovered; and 
(iii) cocaine,  that is, methyl -benzoyl-laevo-ecgonine having the chemical form ula C 17 H21 
NO4, and its salts; 
(ab) “coca leaf” means— 
(i) the leaf and young twigs of any coca plant, that is,  of the Erythroxylon coca (Lamk ) and 
the Erythroxylon novo -granatense (Hiern.) and their varieties, and of any other species of this 
genus which the Central Governme nt may, by notification in the Official Gazette, declare to be 
coca plants for the purposes of this Act; and 
(ii) any mixture thereof, with or without neutral materials;] 
(b) “collecting Government” means the Central Government or, as the case may be, the State 
Government which is entitled to collect the duties levied under this Act; 
4[(bb) “derivative of opium” means— 
(i) medicinal opium, that is, opium which has under gone the processes necessary  to adapt it 
for medicinal use; 
(ii) prepared opium, that is,  any product of opium obtained by any series of operations 
designed to transform opium into an extract suitable for smoking, and the dross or other residue 
remaining after opium is smoked; 
(iii) morphine, that is, the principal alkaloid of opium having the  chemical formula C 17 H19 
NO3, and its salts, and its derivatives;] 
                                                           
1. This Act has been extended to Goa, Daman and Diu by Reg. 12 of 1962, s. 3 and the Schedule., and to Pondicherry  
(w.e.f. 1-10-1963) by Reg. 7 of 1963, s. 3 and the First Schedule. 
2. Subs. by Act 66 of 1976, s. 39, for “opium, Indian hemp or other narcotic drug or narcotic” (w.e.f. 27-05-1976). 
3. 1st April, 1957, vide notification No. S.R.O. 892, dated 9th March, 1957, see Gazette of India, Extraordinary, Part II, sec. 3. 
4. Ins. by Act 66 of 1976, s. 39 (w.e.f. 27-05-1976). 
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(c) “dutiable goods ” means the medicinal and toilet preparations specified in the Schedule as 
being subject to the duties of excise levied under this Act; 
(d) “excise officer” means an off icer of the Excise Department of any State and includes any 
person empowered by the collecting Government to exercise all or any of the powers of an  excise 
officer under this Act; 
1[(e) “Indian hemp” means— 
(i) the leaves, small stalks and flowering or fruiting tops of the Indian hemp plant (Cannabis 
sativa L.), including all forms known as bhang, siddhi or ganja; 
(ii) charas, that is, the resin obtained from the Indian hemp plant, which has not been 
submitted to any manipulations other than those necessary for packing and transport; 
(iii) any mixture, with or without neutral materials, of any of the above forms of Indian hemp 
or any drink prepared therefrom; and 
(iv) any extract or tincture of any of the above forms of Indian hemp;] 
(f) “manufacture” includes any process incidental or ancillary to the completion of the 
manufacture of any dutiable goods; 
(g) “medicinal preparation” includes all drugs which are a remedy or prescription prepared for 
internal or external use of human beings or animals and all substances intended to be used for or in 
the treatment, mitigation or prevention of disease in human beings or animals; 
2[(h) “narcotic drug” or “narcotic” means a substance which is coca leaf, or coca derivative, or 
opium, or derivative of opium, or Indian hemp and shall include any other substance, capable of 
causing or producing in human beings dependence, tolerance and withdraw al syndromes and which 
the Central Government may, by notification in the Official Gazette, declare to be a narcotic drug or 
narcotic;]  
3[(i) “opium” means— 
(1) the capsules of the poppy (Papaver somniferum (L), whether in their original form or cut, 
crushed or powdered and whether or not juice has been extracted therefrom; 
(2) the spontaneously coagulated juice of such capsules which has not been submitted to any 
manipulations other than those necessary for packing and transport; and 
(3) any mixture, with or without neutral materials, of any of the above forms of opium, 
and includes any derivative of opium;] 
(j) “prescribed” means prescribed by rules made under this Act; 
(k) “toilet preparation” means any preparation which is intended for use in the toilet of the human 
body or in perfum ing apparel of any description or any substance intended to cleanse, improve or 
alter the complexion, skin, hair or teeth, and includes deodorants and perfumes. 
LEVY AND COLLECTION OF DUTIES 
3. Duties of excise to be levied and collected on certain goods.―(1) There shall be levied duties of 
excise, at the rates specified in the Schedule, on all dutiable goods manufactured in India. 
(2) The duties aforesaid shall be leviable— 
(a) where the dutiable goods are manufactured in bond, in the State in which such g oods are 
released from a bonded warehouse for home consumption, whether such State is t he State of 
manufacture or not; 
                                                           
1. Subs. by Act 66 of 1976, s. 39, for clause (e) (w.e.f. 27-05-1976). 
2. Subs. by s. 39, ibid., for clause (h) (w.e.f. 27-05-1976). 
3. Subs. by Act 5 of 1964, s. 64, for clause (i) (w.e.f. 28-4-1964). 
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(b) where the dutiable goods are not manufactured in bond, in the State in whi ch such goods are 
manufactured. 
(3) Subject to the other provisions contained in this Act, the duties aforesaid shall be collected in such 
manner as may be prescribed. 
Explanation.―Dutiable goods are said to be manufactured in bond within the meaning of this section 
if they are allowed to be manufactured without payment of any duty of excise leviable under any law for 
the time being in  force in respect of alcohol, 1[narcotic drug or narcot ic] which is to be used as an 
ingredient in the manufacture of such goods. 
4. Rebate of duty on alcohol, etc., supplied for  manufacture of dutiable goods .―Where alcohol 
1[narcotic drug or narcotic ] had been supplied to a manufacturer of any dutiable goods for use as an 
ingredient of such goods by, or under the authority of, the collecting Government and a duty of excise on 
the goods so supplied had already been recovered by such Government under an y law for the time being 
in force, the collecting Government shall, on an application being made to it in this behalf, grant in 
respect of the duty of excise leviable under this Act, a rebate to such manufacturer of the excess, if any, of 
the duty so recovered over the duty leviable under this Act. 
5. Recovery of sums due to Government .―In respect of the duty of excise and any other sums of 
any kind payable to the collecting Government under any of the provisions of this Act or of the rules 
made thereunder, the excise officer empowered by the said rules to levy such duty or require the payment 
of such sums, may deduct the amount so payable from any money owing to the person from whom such 
sums may be recoverable or due, which may be in his hands or under his  disposal or control or may 
recover the amount by attachment and sale of dutiable goods belonging to such person; and if the amount 
payable is not so recovered, he may prepare a certificate signed by him specifying the amount due from 
the person liable to pay the sum and send it to the Collector of the district in which such person resides or 
conducts his business, and the said Collector on receipt of such certificate shall proceed to recover from 
the said person the amount specified therein in the same manner as an arrear of land revenue. 
6. Certain operations to be subject to licences .―(1) The Central Government may, by notification 
in the Official Gazette, provide that from such date as may be specified in the notification, no person shall 
engage in the production or manufacture of any dutiable goods or of any specified component parts of 
ingredients of such goods or of specified containers of such goods or of labels of such containers except 
under the authority and in accordance with the terms and conditions of a licence granted under this Act. 
(2) Every licence under sub-section (1) shall be granted for such area, if any, for such period, subject 
to such restrictions and conditions, and in such form and containing such particulars as may be prescribed. 
7. Offences and penalties.―If any person— 
(a) contravenes any of the provisions of a notification issued under section 6; or 
(b) evades the payment of any duty of excise payable under this Act; or  
(c) fails to supply any information which he is required by rules made under this Act to supply or 
(unless with a reasonable belief, the burden of proving which shall be upon him, that the information 
supplied by him is true) supplies false information; or 
(d) attempts to commit or abets the commission of any offence mention ed in clause ( a) or  
clause (b), 
he shall for  every such offence be punishable with imprisonment for a term which may extend to six 
months, or with fine which may extend to two thousand rupees, or with both. 
8. Power of Courts to order forfeiture .―Any Court trying any offence under section 7 may order 
the forfeiture to the collecting Government of any dutiable goods in respect of which the Court is satisfied 
that an offence under this Act has been committed, and may also order the forfeiture of any alcohol, drugs 
or materials by means of which the offence has been committed and of any receptacles, packages or 
coverings in which any such goods or articles are contained and the animals, vehicles, vessels or other 
                                                           
1. Subs. by Act 66 of 1976, s. 39, for “opium, Indian hemp or other narcotic drug or narcotic” (w.e.f. 27-05-1976). 
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conveyances used in carrying such goods  or articles and any implements or machinery used in  the 
manufacture of such goods. 
POWERS AND DUTIES OF OFFICERS AND LANDHOLDERS 
9. Power to arrest.―(1) Any excise officer duly empowered by rules made in this behalf may arrest 
any person whom he has reason to believe to be liable to punishment under this Act. 
(2) Any person accused or reasonably suspected of committing an offence under this Act or any rules 
made thereunder, who, on demand of any excise officer duly empowered by rules made under this A ct, 
refuses to give his name and residence, or who gives a name or residence which such officer has reason to 
believe to be false may be arrested by such officer in order that his name an d residence may be 
ascertained. 
10. Power to summon persons to give evidence and produce docume nts in inquiries under this 
Act.―(1) Any excise officer duly empowered by rules made in this behalf 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 which such officer is making for any of the purposes of this Act. 
(2) A summons to produce documents or other things under sub-section (1) may be for the production 
of certain specified documents or things or for the product ion of all documents or things of a certain 
description in the possession or under the control of the person concerned. 
(3) All persons so summoned shall be bound to attend either in person or by an authorised agent as 
such officer may direct and all perso ns so summoned shall be bound to state the truth on any subject 
respecting which he is examined or make statements and produce such documents and o ther things as 
may be required: 
Provided that the exemptions under section 132 and section 133 of the Code of Civil Procedure, 1908 
(5 of 1908) shall apply to requisitions for attendance under this section. 
(4) Every such inquiry as aforesaid shall be deemed to be a judicial proceeding within the meaning of 
section 193 and section 228 of the Indian Penal Code (45 of 1860). 
11. Officers requ ired to assist Excise Officers .―All officers of Customs and Central Excise, and 
such other officers of the Central Government as may be specified in this behalf, and all police officers 
and all officers engaged in the collection  of land revenue are hereby empowered and required to assist 
excise officers in the execution of this Act. 
12. Owners or occupiers of land to report manufactur e of contraband dutiable goods .―Every 
owner or occupier of land and the agent of any such owner o r occupier in charge of the management of 
that land, if dutiable goods are manufactured thereon in contravention of the provisions of this Act or the 
rules made thereunder, shall, in the absence of reasonable excuse, be bound to give notice of such 
manufacture to a magistrate or to an officer of the Excise, Customs, Police or Land Revenue Department 
immediately the fact comes to his notice. 
13. Punishment for connivance at offences .―Any owner or occupier of land or any agent of such 
owner or occupier in charge of the management of that land, who wilfully connives at any offence against 
the provisions of this Act or any rules made thereunder shall, for every such offence, be punishable  with 
imprisonment for a term which may extend to six months, or with fine which may extend to fi ve hundred 
rupees or with both. 
14. Searches and arrests how to be made .―All arrests and searches made under this Act or under 
any rules made thereunder shall be carried out in accordance with the provisions of the Co de of Criminal 
Procedure, 18981 (5 of 1898), relating respectively to searches and arrests under that Code. 
15. Disposal of persons arrested .―(1) Every person arrested under this Act shall be forwarded 
without delay to the nearest excise officer empowered to send persons so arrested to a magistrate or if 
there is no  such excise officer within a reasonable distance to the officer in charge  of the n earest police 
station. 
                                                           
1. See now the Code of Criminal Procedure, 1973 (Act 2 of 1974). 
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(2) The officer in charge of a police station to whom any person is forwarded under sub -section (1) 
shall either admit him to bail to appear before a magistrate having jurisdiction, or in default of bail 
forward him without delay in custody to such Magistrate. 
16. Inquiry how to be made by excise officers against arre sted persons forwarded to them.―(1) 
When any person is forwarded under section 15 to an excise officer empowered to send persons so 
arrested to a magistrate, the excise officer shall proceed to inquire into the charge against him. 
(2) For the purpose of sub -section (1), the excise officer may exercise the same powers, and shall be 
subject to the same provisions, as the officer in charge of a police station may exercise an d is subject to 
under the Code of Criminal Procedure, 1898 (5 of 1898), when investigating a cognizable case: 
Provided that— 
(a) if the excise officer is of opinion that there is sufficient evidence or reasonable ground of 
suspicion against the accused per son, he shall either admit him to bail to appear before a magistrate 
having jurisdiction in the case, or forward him in custody without delay to such magistrate; 
(b) if it appears to the excise officer that there is not sufficient evidence or reasonable gr ound of 
suspicion against the accused person, he shall release the accused person on his executing a bond, 
with or without sureties as the excise officer may direct, to appear, if and when so required, before the 
magistrate having jurisdiction and shall ma ke a full report of all the particulars of the case to hi s 
official superior. 
(3) All officers exercising any powers under section 15 or this section shall so exercise their powers 
as to ensure that every person who is arrested and detained in custody is p roduced before the nearest 
magistrate within a period of twenty -four hours of such arrest excluding the time necessary for the 
journey from the place of arrest to the Court of the magistrate. 
17. Vexatious search, seizure, etc., by excise officer.―(1) Any officer exercising powers under this 
Act or under the rules made thereunder who— 
(a) without reasonable ground of suspicion searches or causes to be searched any p lace, 
conveyance or vessel; 
(b) vexatiously and unnecessarily detains, searches or arrests any person; 
(c) vexatiously and unnecessarily seizes the movable property of any person on pretence of 
seizing or searching for any article liable to confiscation under this Act; 
(d) commits, as such officer, any other act to the injury of any person, without having reason to 
believe that such act is required for the execution of his duty; 
shall, for every such offence, be punishable with fine which may extend to two thousand rupees. 
(2) Any person wilfully and maliciously giving false information and so causing an arrest or a search 
to be made under this Act shall be punishable with imprisonment for a term which may extend to two 
years, or with fine which may extend to two thousand rupees, or with both. 
18. Failure of  excise officers on duty .―Any excise officer who ceases or refuses to perform, or 
withdraws himself from, the duties of his office, unless he had obtained the express written permission of 
his superior officer or has given such superior officer two months’ notice in writing of his intention or has 
other lawful excuse, shall be punishable with imprisonment for a term which may extend to three months, 
or with fine which may extend to three months’ pay, or with both.  
SUPPLEMENTARY PROVISIONS 
19. Power to make rules.―(1) The Central Government may, by notification in the Official Gazette, 
make rules to carry out the purposes of this Act. 
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may— 
(i) provide for  the assessment and collection of duties levied under this Act, the authorities by 
whom functions under this Act are to be discharged, the issue of notices requiring payment, the 
manner in which the duties shall be payable and the recovery of duty not paid; 
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(ii) prohibit absolutely, or with such exceptions, or subject to such conditions as the Central 
Government may think fit, the manufacture, or any process of the manufacture, of dutiable goods or 
of any component parts or ingredients or containers thereof , except on land or pre mises approved for 
the purpose; 
(iii) regulate the removal of dutiable goods from the place where they are stored or m anufactured 
or subjected to any process of production or manufacture and their transport to or from the premises 
of a licensed person, or a bonded warehouse, or to a market; 
(iv) regulate the production or manufacture 1[or any process] of production or manufacture, the 
possession and storage of dutiable goods or of any component parts or ingredients or containers 
thereof, so far as such regulation is essential for the proper levy and collection o f duties levied under 
this Act; 
(v) provide for the employment of excise officers to supervise the carrying out of  any rules made 
under this Act; 
(vi) require a manufacturer or the licensee of a warehouse to provide accommodation within the 
precincts of his factory or warehouse for excise officers employed to supervise the carrying out of 
rules made under this Act and prescribe the scale of such accommodation; 
(vii) provide for the appointment, licensing, management and supervision of bonded warehouses 
and the procedure to be followed in entering dutiable goods into and clearing goods from such 
warehouses or in the movement of dutiable goods from one bonded warehouse to another; 
(viii) provide for the distinguishing of excisable goods which have been manufactured under 
licence, of materials which have been imported under licence and of goods on which duty has been 
paid or which are exempt from duty under this Act; 
(ix) impose on persons engaged in the manufacture, storage or sale (whether on their own account 
or as brokers or commission agents) so far as such imposition is essential for the proper levy and 
collection of the duties levied under this Act, the duty of furnishing infor mation, keeping records and 
making returns and prescribe the nature of such information and form of such records and returns, the 
particulars to be contained therein and the manner in which they shall be verified; 
(x) require that dutiable goods shall not be sold or offered or kept for sale except in prescribed 
containers, bearing a banderol, stamp or label of such nature and affixed in su ch manner as may be 
prescribed; 
(xi) provide for the issue of licences and transport permits and the fees, if any, to be  charged 
therefor; 
(xii) provide for the detention of dutiable goods, plant, machinery or material for th e purpose of 
exacting the duty; 
(xiii) provide for the confiscation of dutiable goods in respect of which a breach of any rule made 
under this Act has been committed, and also for the confiscation of any alcohol, drugs or materials by 
means of which the breach has been committed and of any receptacle, packages or covering in which 
such goods or articles are contained, and the animals, vehicles, vessels o r other conveyances used in 
carrying such goods or articles and any implements or machinery used in  the manufacture of such 
goods; 
(xiv) provide for the levy of a penalty not exceeding two thousand rupees for a breach o f any rule 
made under this Act; 
(xv) provide for the procedure in connection with such confiscation and the imposition of such 
penalty, the maximum limits up to which particular classes of excise officers may adjudge such 
confiscation or penalty, appeals from orders of such officers and revis ion of such orders by some 
higher authority, the time -limit for such appeals and revisions and the disposal of goods and articles 
confiscated; 
                                                           
1. Subs. by Act 58 of 1960, s. 3 and the Second Schedule, for “of any process” (w.e.f. 26-12-1960). 
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(xvi) authorise and regulate the compounding of offences against, or liabilities incurred under, 
this Act or the rules made thereunder; 
(xvii) authorise and regulate the inspection of factories and provide for the taking of samples or 
for the making of tests of any substance produced therein and for the inspection or search of any 
place, conveyance or vessel used for  the production, storage, sale or transport of dutiable goods in so 
far as such inspection or search is essential for the proper levy and collection of th e duties levied 
under this Act; 
(xviii) provide for the grant of a rebate of the duty paid on dutiable  goods which are exported out 
of India or shipped for consumption on a voyage to any port outside India; 
(xix) exempt any dutiable goods from the whole or any part of the duty levied under this Act 
where in the opinion of the Central Government, it is nece ssary to grant such exemption in the 
interest of the trade or in the public interest; 
(xx) notify in the Official Gazette lists of the names and descriptions of preparations which would 
fall for assessment under any particular item of the Schedule or for r egulating their manufactu re, 
transport and distribution; 
(xxi) authorise particular classes of excise officers to provide by written instructions for 
supplemental matters arising out of any rule made by the Central Government under this section. 
(3) Where any confiscation or penalty has been adjudged in respect of a breach of any rule under this 
Act, which is also an offence under section 7, the person concerned shall not be  prosecuted under that 
section. 
1[(4) Every rule made under this section shall be laid as soon as may be after it is made before each 
House of Parliament while it is in session for a total period of thirty days which may b e comprised in one 
session or 2[in two or more successive sessions, and if, before the expiry of the session immedia tely 
following the session or the successive sessions aforesaid] both Houses agree in making any modification 
in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only 
in such modified form or be of no ef fect, 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.] 
20. Bar of suits and limitation of sui ts and other legal proceedings .―(1) No suit or oth er legal 
proceeding shall lie against the collecting Government or against any officer in respect of any order 
passed in good faith or any act in good faith done or ordered to be done under this Act. 
(2) No suit, prosecution or other legal proceeding shall  be instituted against the collecting 
Government or against any officer for anything done or ordered to be done under this Act after the 
expiration of six months from the accrual of the cause of action or from the date of the act or order 
complained of. 
21. Repeals and savings.―If, immediately before the commencement of this Act, there is in force in 
any State any law corresponding to this Act, that law is hereby repealed: 
Provided that all rules made, notifications issued, licences or permits granted, powers conferred under 
any law hereby repealed shall, so far as they are not inconsistent with this Act, have the same force and 
effect as if they had been respectively made, issued, granted or conferred under this Act and by the 
authority empowered hereby in that behalf.  
                                                           
1. Subs. by Act 19 of 1961, s. 2, for sub-section (4) (w.e.f. 1-6-1961). 
2. Subs. by Act 20 of 1983, s. 2 and the Schedule, for “in two successive sessions, and if before the expiry of the session in which 
it is so laid or the session immediately following” (w.e.f. 15-3-1984). 
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 1[THE SCHEDULE 
(See section 3) 
Item 
No. 
Description of dutiable goods           Rate of duty 
(1) (2) (3) 
Medicinal Preparations 
1. Allopathic Medicinal Preparations: 
(i) Medicinal preparations containing alcohol which are 
not capable of being consumed as ordinary alcoholic 
beverages― 
 
         (a) Patent or proprietary medicines Twenty per cent. ad valorem.  
          (b) Others Twenty per cent. ad valorem. 
 (ii) Medicinal preparations containing alcohol which are 
capable of being consumed as ordinary alcoholic 
beverages― 
 
        (a) Medicinal preparations which contain known 
active ingredients in therapeutic quantities 
Twenty per cent. ad valorem. 
        (b) Others Twenty per cent. ad valorem. 
 (iii) Medicinal preparations not containing alcohol but    
containing narcotic drug or narcotic 
Twenty per cent. ad valorem. 
2. Medicinal preparations in Ayurvedic, Unani or other 
indigenous systems of medicine― 
 
 (i) Medicinal preparations containing self-generated 
alcohol which are not capable of being consumed as 
ordinary alcoholic beverages 
Four per cent. ad valorem. 
 (ii) Medicinal preparations containing self-generated 
alcohol which are capable of being consumed as 
ordinary alcoholic beverages 
Four per cent. ad valorem. 
 (iii) All others containing alcohol which are prepared by 
distillation or to which alcohol has been added 
 Six per cent. ad valorem. 
 (iv) Medicinal preparations not containing alcohol but 
containing narcotic drug or narcotic 
Twenty per cent. ad valorem. 
3. Homeopathic preparations containing alcohol Four per cent. ad valorem. 
Toilet preparations 
4. Toilet preparations containing alcohol or narcotic drug or 
narcotic 
  Fifty per cent. ad valorem. 
 Explanation I .―“Patent or proprietary medicines ” means any medicinal preparation 
which bears either on itself or on its container or both, a name which is not specified in a 
monograph in a pharmacopoeia, formulary or other publications notified in this behalf by 
the Central Government in the Official Gazette, or which is a brand name, that is, a name or 
a registered trade-mark under the Trade and Merchandise M arks Act, 1958 (43 of 1958) or 
any other mark such as a symbol, monogram, label, signature or invented words or any 
writing which is used in relati on to that medical preparations for the purpose of indicating 
or so as to indicate a connection in the course of trade between the preparation and some 
person having the right either as proprietor or otherwise to use the name or mark with or 
without any indication of the identity of that person. 
                                                           
1. Subs. by Act 10 of 2000, s. 115 and the Sixth Schedule (w.e.f. 1-3-2003). 
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 Explanation II.―Where any article is chargeable to duty at a rate dependent on the value 
of the article, such value shall be deemed to be the value as determined in accordance with 
the provisions of section 4 of the Central Excise Act, 1944 (1 of 1944). 
 Explanation III.―(1) Notwithstanding anything contained in Explanation II, the Central 
Government may, by notification in the Official Gazette, specify any dutiable goods, in 
relation to which it is required, under the provisions of the 1[Legal Metrology Act, 2009  
(1 of 2010)] or the rules made thereunder or under any other law for the time being in force, 
to declare on the package thereof the retail sale price of such goods, to which the provisions 
of clause (2) shall apply. 
(2) Where dutiable goods specified under clause ( 1) are chargeable to duty with 
reference to value, then , notwithstanding anything contained in Explanation II, such value 
shall be deemed to be retail price declared on such goods less such amount of abatement, if 
any, from such retail price as the Central Go vernment may allow by notification in the 
Official Gazette. 
(3) The Central Government may, for the purpose of allowing any abatement under  
clause (2), take into account the duty of excise, sales tax and other taxes, if any, payable on 
such goods. 
(4) Where on the package of any dutiable goods more than one retail sale price is 
declared, the maximum of such retail sale shall be deemed to be the retail sale price for the 
purposes of clause (2). 
(5) Where different retail sale prices are declared on diffe rent packages for the sale of 
any dutiable goods in packaged form in different areas, each such retail sale price shall be 
the retail sale price for the purposes of valuation of the dutiable goods intended to be sold in 
the area to which the retail sale price relates. 
(6) For the purpose of this Explanation, “retail sale price” means the maximum price at 
which the excisable goods in packaged form may be sold to the ultimate consumer and 
includes all taxes local or otherwise, freight, transport charge, commi ssion payable to 
dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, 
as the case may be, and the price is the sole consideration for such sale.] 
 
 
 
                                                           
1. Subs. by Act 8 of 2011, s. 76, for “Standards of Weights and Measures Act, 1976 (60 of 1976)” (w.e.f. 8-4-2011). 
Notification                                                                                             New Delhi, dated the 1st March, 2003
No.  3/2003-M&TP                                                                                                   10 Phalguna, 1924 (Saka)
G.S.R.        (E) .- In exercise of the powers conferred by section 3 of the Medicinal and Toilet
Preparations (Excise Duties) Act, 1955 (16 of 1955), read with clause (1) of Explanation III  of the
Schedule to the said Act, the Central Government hereby specifies that the provisions of clause (2) of said
Explanation III shall apply to the dutiable goods of the description specified in column (3) of the Table
below and falling within the Item No. of the said Schedule, specified in the corresponding entry in column
(2) of the said Table and allows as abatement the percentage of the retail sale price as specified in the
corresponding entry in column (4) of the said Table.
Table
S. No. Item No. Description of dutiable goods Abatement
(1) (2) (3) (4)
1. 4. Toilet preparations containing alcohol or narcotic
drug or narcotic
40%
[F.No.334/1/2003-TRU]
(Alok Shukla)
Deputy Secretary to the Government of India

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