Excise duty collection fell by 8.7 percent in September to Rs 11,432 crore from Rs 12,528 in same month last year, showing weak manufacturing activity.
"The drop in excise collections shows that there has been a fall in the manufacturing activity," Central Board of Excise and Customs (CBEC) Chairman S D Majumder told PTI.
He expressed hope that customs and excise revenues pick up in October on account of the festive season, he added.
The excise collections dropped sharply in September to Rs 11,432 crore whereas customs mop-up grew by a marginal 7.2 percent to Rs 12,286 crore during the month, according to the Finance Ministry's latest data.
"The 7.2 percent growth in customs is mainly due to fall in rupee which has also depreciated 7 percent," Majumder said.
The overall collections for September went up by just 5.9 percent at Rs 32,416 crore against Rs 30,608 crore in the same month last year.
However, the April-September data showed an overall rise of 20.4 percent in indirect tax revenues at Rs 1,90,141 crore.
The customs collections in the first six months of the current fiscal expanded 19.4 percent at Rs 75,613 crore, and excise collections also grew 13.2 percent and stood at Rs 71,058 crore.
Besides, services tax collections registered a robust 36.5 percent growth in the April-September period at Rs 43,470 crore. For September, it was up 31.4 percent at Rs 8,698 crore.
The industrial growth of the country slowed to 4.1 percent in August on account of the poor performance of the manufacturing sector and a decline in mining output, indicating a economic slowdown.
Growth in factory output, as measured in terms of the Index of Industrial Production (IIP), stood at 4.5 percent in August last year.
Besides, economic growth in the first quarter (April- June) also fell to a six quarter low of 7.7 percent.