Explanation:

Power to levy, collect and appropriate a tax: o The Constitution draws a distinction between the power to levy and collect a tax and the power to appropriate the proceeds of the tax so levied and collected. o For example, the income-tax is levied and collected by the Centre but its proceeds are distributed between the Centre and the states. • Taxes Levied by the Centre but Collected and Appropriated by the States (Article 268): o This category includes the following taxes and duties: ? Stamp duties on bills of exchange, cheques, promissory notes, policies of insurance, transfer of shares and others. ? Excise duties on medicinal and toilet preparations containing alcohol and narcotics. o In the case of these duties leviable within any Union territory, they are collected by the Government of India. Hence statement 1 is correct. o In other cases, these duties are collected by the States within which such duties are respectively leviable. o The proceeds of these duties levied within any state do not form a part of the Consolidated Fund of India, but are assigned to that state i.e they become part of Consolidated Fund of respective state government. Hence statement 2 is correct.