Chapter III HEALTH SECURITY SE NATIONAL SECURITY CESS

1. (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. (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. (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.

1. (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. (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;
   • (c) at the monthly amount of cess specified in column (4) in Table 1 of Schedule II against such rated speed and weight provided therein.
3. (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. (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. (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. (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. (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.

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.

1. (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.

1. (1) The cess shall be levied for the purposes of meeting expenditure on the national security of India and for public health.
2. (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.
3. (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.