Excise duty on pan masala not containing tobacco will be reduced from 66 per cent to 45 per cent, Finance Minister P Chidambaram told the Lok Sabha on Wednesday.

However, pan masala containing tobacco will continue to bear an excixe duty of 66 per cent, he said presenting the 2007-08 Budget.

"I also propose to withdraw the exemption for pan masala containing tobacco and other tobacco products that is now given to units in North-Eastern states," he said.