- (1.) THE petitioners are manufacturers. However, classification of their product is disputed. It is for this reason a search was conducted at their units under Central Excise Act, 1944 (the Excise Act). These writ petitions revolve around legality of the same.
(2.) THE Central Government has framed Central Excise Rules, 1944 (the Rules) under the Excise Act. In pursuance of the powers confirmed under rule 8(1) of the Rules, the Government issued a notification on 10.2.1986 (the exemption notification) listing the goods that were exempt from the excise duty. Entry No. 6 of this notification is 'Kattha (Catechu)': it is exempted from duty. The exemption notification was amended on 1.3.2003. Entry No. 6 now stands as 'Kattha (Catechu) excluding Gambier'. Traditionally, Kattha is manufactured from Khair wood. It is exempted from excise duty. The petitioners case is that: It can be manufactured from Gambier, which is imported from outside; They purchase Gambier from the market and manufacture Kattha from it. They are not liable pay excise duty.
(3.) THE Central Excise Department at Kanpur (the Department) disputed the claim of the petitioners. They started investigating it. A search was conducted on 4th September 2003 in six units in Kanpur. Out of these six, we are concerned with the three that are petitioners in WP (Tax) 1289 of 2003 (the first WP), WP (Tax) 1290 of 2003 (the second WP), and WP (Tax) 1334 of 2003 (the third WP).;