Excise Act (R.S.C., 1985, c. E-14)

Marginal note:Regulations

• 45 (1) The Minister may make regulations

  • (a) specifying instruments, or classes, types or designs of instruments, for the purposes of subsection 44(1);

  • (b) prescribing the manner in which approval of an instrument under section 44 is to be indicated on the instrument and providing for the removal of the indication and the issue or cancellation of certificates in relation thereto;

  • (c) prescribing the manner in which quantities or volumes of alcohol, spirits or absolute ethyl alcohol are to be determined for the purposes of subsection 44(1);

  • (d) prescribing the fees to be paid for the examination or re-examination of instruments under section 44 and for any other service or good provided by the Minister in relation to that section; and

  • (e) prescribing specifications for any instrument, or any class, type or design of instrument, for the purposes of subsection 44(1).

• Marginal note:Commencement of regulations

  (2) Any regulation made pursuant to subsection (1) may be made effective with reference to any period commencing on or after March 31, 1981.

• Marginal note:Determination of alcohol, etc., in special circumstances

  (3) Where circumstances or conditions make it difficult to determine a quantity or volume of alcohol, spirits or absolute ethyl alcohol in accordance with subsection 44(1), the determination may be made in another manner or by another method that is approved by the Minister.

Marginal note:Power to restore reduced duties

46 Where the duty imposed under this Act on spirits, malt or beer has been reduced, and it is made to appear to the Governor in Council that in any province the prices of spirituous or malt liquors to the consumer have not been reduced to, or are not being maintained at, levels that will give the consumer the full benefit of that reduction, the Governor in Council may order that the reduction shall be no longer in effect and, on publication of that order in the Canada Gazette, the full rates of duty theretofore payable on those goods shall again be in force and effect.

Marginal note:Duties due on passing of entry

• 47 (1) Except as otherwise provided in this Act, the several duties imposed by this Act shall be levied in respect of any goods subject to duty when those goods are entered for consumption by the manufacturer or importer thereof, and shall be payable and collected at that time or at such later time and in such manner as is prescribed by the regulations.

• Marginal note:Monthly returns

  (2) Except as otherwise provided in this Act, all goods subject to excise, the manufacture of which has been completed during any month, shall be returned as produced, and at the end of each month shall either be entered for duty ex-manufactory or be warehoused.

• Marginal note:Entry requirement for manufactured tobacco and cigars

  (3) All manufactured tobacco and cigars that are manufactured in Canada shall, at the time they are completely manufactured, be entered for consumption or be entered into a bonding warehouse, in accordance with this Act and the ministerial regulations.

Marginal note:No removal until duty paid

• 48 (1) No goods that are subject to a duty of excise under this Act shall be removed from any premises subject to excise or from any premises subject to excise to any retail outlet on those premises, until the duty on those goods has been paid or secured by bond in the manner by law required.

• Marginal note:Idem

  (2) Subsection (1) does not apply in respect of goods the payment of duty on which may, under any regulations made pursuant to subsection 47(1), be made at a time later than the time at which they are entered for consumption.

• Marginal note:Presumption

  (3) For the purposes of subsection (1), a retail outlet is deemed to be on premises subject to excise if it is in a building or other place that forms part of or is appurtenant to, or that communicates in any way whatever, except by means of a public highway, with those premises.

Bonding and Warehousing

Marginal note:Bonding warehouse

49 Any portion of the premises of a manufacturer licensed under this Act that is designated as a bonding warehouse in the manufacturer’s application for a licence and shown as such on the plans accompanying the application shall, on the granting of the licence, be a bonding warehouse within the meaning of this Act.

Marginal note:To whom bonding warehouse licence may be granted

• 50 (1) Subject to this Act and any regulation made under this Act, a licence for a bonding warehouse may be granted to

  • (a) any distiller for the storage, at a place other than his distillery, of specially denatured alcohol or alcohol intended for use exclusively in manufacturing or for commercial purposes and not for use as a beverage or in the manufacture of a beverage;

  • (b) any board, commission or other government agency that by the law of a province is empowered to sell or to authorize the sale of intoxicating liquor; or

  • (c) any person who is authorized by a licensed tobacco manufacturer or a licensed cigar manufacturer to be the only person, other than the manufacturer, who is entitled to distribute the manufacturer’s tobacco or cigars to accredited representatives, exclusively for the storage in the warehouse and subsequent sale of the manufacturer’s tobacco or cigars to accredited representatives.

• Marginal note:Bond

  (2) Prior to the issue of a licence for a bonding warehouse to a distiller pursuant to paragraph (1)(a), the distiller shall, jointly with a guarantee company approved by the Minister, enter into a bond to Her Majesty in right of Canada in an amount determined by the Minister and conditioned on the payment of all duties and penalties to which the owner of the warehouse or of any goods stored therein may become liable under this Act.

• Marginal note:Idem

  (3) Prior to the issue of a licence for a bonding warehouse to a board, commission or other government agency pursuant to paragraph (1)(b), the board, commission or other government agency shall enter into a bond to Her Majesty in right of Canada in an amount determined by the Minister and conditioned in the manner described in subsection (2).

• Marginal note:Idem

  (4) Before a licence for a bonding warehouse is granted to a person under paragraph (1)(c), the person shall, jointly with a guarantee company approved by the Minister, enter into a bond to Her Majesty in right of Canada in an amount determined by the Minister as security for the payment of any amount that is or may become payable under this Act or the Excise Tax Act in respect of goods stored in the warehouse.

• Marginal note:Limitation on granting licence

  (5) No person shall be granted a licence under paragraph (1)(c) for more than one bonding warehouse.

Marginal note:Cancellation of bonding warehouse licence

• 50.1 (1) Where a person has been granted a licence for a bonding warehouse under paragraph 50(1)(c) by reason of being authorized by a licensed tobacco manufacturer or a licensed cigar manufacturer to be the only person, other than the manufacturer, who is entitled to distribute the manufacturer’s tobacco or cigars to accredited representatives and the person ceases to be so authorized, the Minister shall cancel that licence.

• Marginal note:Return of tobacco and cigars on cancellation of licence

  (2) On the cancellation, suspension or revocation of a licence granted under paragraph 50(1)(c), the person to whom the licence was granted shall return all the tobacco and cigars stored in the bonding warehouse at the time the licence is cancelled, suspended or revoked to the licensed manufacturers of the tobacco and cigars.

Marginal note:Fee for bonding warehouse licence

51 A person to whom, or a board, commission or government agency to which, a licence for a bonding warehouse is granted under subsection 50(1) shall pay a licence fee prescribed by the regulations to the collector of the district or excise division in which the warehouse is located.

Marginal note:Warehousing of goods

52 Goods subject to excise may, subject to the following provisions and to ministerial regulations, be deposited in any suitable bonding warehouse without payment of the duty imposed by this Act.

Marginal note:Limitation on entry of tobacco into bonding warehouse

52.1 Manufactured tobacco shall not be entered into a bonding warehouse if it is intended to be removed for

• (a) delivery to a duty free shop licensed as such under the Customs Act;

• (b) export for delivery to a foreign duty free shop;

• (c) export for delivery as foreign ships’ stores;

• (d) entry into a bonded warehouse, licensed as such under the Customs Tariff; or

• (e) delivery as ships’ stores in accordance with the regulations made under the Customs Tariff and the Excise Tax Act.

Marginal note:Security of bonding warehouses

53 Bonding warehouses shall be made secure in accordance with requirements prescribed by the regulations.

Marginal note:Goods at owner’s risk

54 All goods warehoused shall be at the risk of the owner and, unless destroyed by fire, the duty shall be payable thereon as if they were entered for consumption.

Marginal note:Term of warehousing

55 Except as otherwise provided in this Act, no goods shall remain warehoused for a period longer than two years, and at the end of that period the full amount of duty remaining unpaid shall be collected, but if no deficiency in the goods exists they may be re-warehoused for a further period of two years.

Marginal note:Deficiency of goods in warehouse

• 56 (1) Where the quantity of goods bonded in any warehouse, at any time or by any means, falls short or is deficient of the actual quantity that ought to be or remain warehoused, after deducting the quantities entered ex-warehouse, the owner thereof is liable for the full duties on the balance of goods with which the warehouse stands debited, and the goods remaining are subject to the duties on the quantity deficient and shall be sold for payment thereof, by order of the Minister, and the surplus, if any, is payable to the person who warehoused the goods, or his assigns, after deducting all penalties and expenses incurred.

• Marginal note:Re-warehousing

  (2) When the Minister is satisfied that no goods have been illegally removed from the warehouse, any goods that are actually in the warehouse at the time stock is taken, or at the expiration of two years, may be re-warehoused on payment of the full amount of duty on the ascertained deficiency.

• Marginal note:Certain spirits subject to an abatement

  (3) Spirits for the fortification of native wines when stored in wooden barrels in a bonding warehouse at a registered winery may, in the event of a deficiency arising, be subject to an abatement, which shall not exceed two-thirds of one per cent for each complete month after the date of original warehousing, but no abatement shall be allowed for a period of more than twelve months, and every abatement shall be made in respect of each specific package and shall in no case exceed the actual deficiency found to exist in the package.

Marginal note:When duty computed

57 At the time of entering goods for warehouse, the amount of duty shall be computed and ascertained and stated in the entry.

Marginal note:Transfer of goods other than cigars and manufactured tobacco in bond

• 58 (1) Goods, other than cigars and manufactured tobacco, warehoused under this Act may, without payment of duty, be transferred or removed from one bonding warehouse to another in bond, exported in bond or released from bond to accredited representatives for their personal or official use, if the transfer, removal, exportation or release is in accordance with the regulations and the ministerial regulations.

• Marginal note:Removal to customs bonded warehouse or duty free shop

  (2) Goods subject to excise, other than cigars and manufactured tobacco, may, without payment of duty, be removed from a bonding warehouse

  • (a) to a bonded warehouse, licensed as such under the Customs Tariff, if the goods are

    • (i) designated for delivery as ships’ stores,

    • (ii) for sale to accredited representatives for their personal or official use, or

    • (iii) for export; or

  • (b) to a duty free shop, licensed as such under the Customs Act, if the goods are for sale to persons who are about to leave Canada.

• Marginal note:Delivery and sale to be in accordance with regulations

  (3) Goods removed under subsection (2) shall be delivered and sold in accordance with any ministerial regulations that apply.

Marginal note:Definitions

• 58.1 (1) The definitions in this subsection apply in this section.

  foreign brand tobacco

  foreign brand tobacco means tobacco in respect of which the excise tax imposed under section 23.13 of the Excise Tax Act is not payable because of section 23.3 of that Act. (tabac de marque étrangère)

  manufactured tobacco

  manufactured tobacco does not include partially manufactured tobacco or foreign brand tobacco. (tabac fabriqué)

  partially manufactured tobacco

  partially manufactured tobacco means a tobacco product made by a tobacco manufacturer that is cut filler or cut rag or that is manufactured less fully than cut filler or cut rag. (tabac partiellement fabriqué)

• Marginal note:Categories of manufactured tobacco

  (2) For the purposes of subsection (4), each of the following constitutes a category of manufactured tobacco:

  • (a) cigarettes;

  • (b) tobacco sticks; and

  • (c) manufactured tobacco other than cigarettes and tobacco sticks.

• Marginal note:Removal of manufactured tobacco in bond

  (3) Manufactured tobacco may, without payment of duty, be removed from a bonding warehouse only if

  • (a) it is

    • (i) removed by its manufacturer and exported in bond in accordance with subsection (4) and not for delivery to a foreign duty free shop or as foreign ships’ stores,

    • (ii) removed by its manufacturer and entered into another bonding warehouse in bond, or

    • (iii) released to accredited representatives for their personal or official use; and

  • (b) the removal and exportation, entry or release, as the case may be, are in accordance with the regulations and the ministerial regulations.

• Marginal note:Maximum quantity permitted to be exported in bond

  (4) A tobacco manufacturer shall not, at a particular time in a calendar year, remove a particular quantity of a category of manufactured tobacco from the manufacturer’s bonding warehouse for export in bond if the total quantity of that category of manufactured tobacco removed in the year up to that time by the manufacturer from a bonding warehouse for export in bond, plus the particular quantity, exceeds 1.5% of the total quantity of manufactured tobacco of that category manufactured by the manufacturer in the preceding calendar year.

• Marginal note:Quantities to be excluded for the purpose of subsection (4)

  (5) The total quantities referred to in subsection (4) shall not include any quantity of manufactured tobacco that was exported by the manufacturer for delivery to a foreign duty free shop or as foreign ships’ stores.

• Marginal note:Removal of cigars in bond

  (6) Cigars may, without payment of duty, be removed from a bonding warehouse only if

  • (a) they are

    • (i) removed by their manufacturer and

      • (A) exported in bond,

      • (B) entered into another bonding warehouse in bond,

      • (C) entered into a bonded warehouse, licensed as such under the Customs Tariff, if the person entering the cigars into the bonded warehouse certifies to the manufacturer that they are for delivery as ships’ stores in accordance with the regulations made under the Customs Tariff and the Excise Tax Act,

      • (D) transferred to a duty free shop, licensed as such under the Customs Act, if the operator of the duty free shop certifies to the manufacturer that the cigars are for sale to persons who are about to leave Canada, or

      • (E) delivered as ships’ stores in accordance with the regulations made under the Customs Tariff and the Excise Tax Act, or

    • (ii) released to accredited representatives for their personal or official use; and

  • (b) the removal and export, entry, transfer, sale, delivery or release, as the case may be, are in accordance with the regulations and the ministerial regulations.

• Marginal note:Removal of partially manufactured tobacco or foreign brand tobacco in bond

  (7) Partially manufactured tobacco or foreign brand tobacco may, without payment of duty, be removed by its manufacturer from a bonding warehouse only if

  • (a) it is entered into another bonding warehouse in bond or exported in bond and not for delivery to a foreign duty free shop or as foreign ships’ stores; and

  • (b) the removal and entry or export, as the case may be, are in accordance with the regulations and the ministerial regulations.

• Marginal note:Diversion

  (8) A person who has acquired goods that are manufactured tobacco, foreign brand tobacco or cigars is liable to pay the duty that would have been payable on the goods at the time the goods were completely manufactured, if the goods

  • (a) have been relieved, under this Act or otherwise, from the duty because of the purpose for which the person acquired them;

  • (b) are removed from a bonded warehouse licensed as such under the Customs Tariff, sold or used by the person for another purpose; and

  • (c) would not have been relieved from the duty if the person had acquired them for the other purpose.

• Marginal note:Duty payable at time of acquisition

  (9) The duty a person is liable to pay under subsection (8) on goods is deemed to have become payable by the person at the time the person acquired the goods.