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The State Excise Department has been established with the creation of a separate State of Nagaland in December 1963; absorbing the Assam Excise staff on deputation who were then deployed in Dimapur, for the purpose of collection of Government revenue and administration of (a) Excise Act and rules, the then (b) Dangerous Drugs Act 1930 and (c) Indian Opium Act 1857. The Assam Act was enforced until such time the State own Act known as Nagaland Excise Act 1967 finally enacted and brought into force with effect from 1st March 1972 for the purpose of Excise Administration and Justice.

The main functions of the department is enforcement of the Nagaland Liquor Total Prohibition Act 1990 and Narcotic Drugs and Psychotropic Substances Act 1985 and Drug & Cosmetic Act 1940 in the whole areas of the State of Nagaland also regulates Liquor transactions and collects Excise Duties on Para-military Bonded wares and Military Canteen Services for the State.Initially, the department functions were more of regulatory and Revenue collections for the State on sale and consumption of liquors, by ways of Excise duties and license fees etc. Revenues were also earned by ways of fine amounts imposed on violations of the Nagaland Excise Act 1967, for production and sale of illicit liquors. The revenues were substantial.

Following the enactment and enforcement of the Nagaland Liquor Total prohibition Act 1990, the designation of the Head of the Department has been changed as Commissioner of Excise and Director of Prohibition and the role of the department been radically changed from Regulatory to enforcement, drastically reducing the revenues collected thus imposing a huge task on the department with very limited manpower and equipments. This Act prohibits manufacturing, sale, transportations, possessions and consumptions of any liquor in Nagaland. Violator/offenders under this Acts is punishable and is penalized by confiscating the prohibited items and imposing fine amounts to the extend of imprisonments.

The department is also responsible for enforcement of the Anti-narcotic drug laws of the country in the state, namely the Narcotic Drugs & Psychotropic Substances act 1985 (NDPS ACT 1985) and the Drugs & Cosmetic Act 1940 in tandem with the State Liquor Acts. Drugs cases are tried by designated Districts Session Judges only. Its enforcement is a huge task considering the extensive drugs abuses and addictions, in the state. Drug laws are enforced in coordination with Narcotic Control Bureau (NCB) Ministry of Home Affairs Government of India.

All the enforcements are carried out by teams of field officers and staffs who are also responsible for gathering of information on the trafficking of prohibited items.

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