B.C.Mitra, J. - (1.) A Company known as New Central Jute Mills Co, Ltd. owns and runs a factory by the name of Sahu Chemicals and Fertilisers at Varanasi. The appellant was the selling agent of the products of this Company including muriate of ammonia and fertiliser. By a notification dated May 28, 1962, Ammonia utilised in the manufacture of fertiliser is exempted, with effect from April 24, 1962, from so much of excise duty as is in excess of Rs. 25/- per metric tonne. The standard rate of duty of ammonia is Rs. 125/- per metric tonne.
(2.) The Excise authorities brought to the notice of Sahu Chemicals and Fertilisers that muriate was distinct from fertiliser and that ammonia used in the manufacture of muriate of ammonia was not entitled to concessional rate and was subject to the standard rate of Rs. 125/- per metric tonne.
(3.) According to the management of Sahu Chemicals and Fertilisers, there was no separate process in the manufacture of muriate of ammonia. The owners of the factory contended that they were producers of fertilisers and the production of muriate was the result of accidents and vagaries of production connected with the manufacture of fertiliser. According to the Excise authorities, on the other hand, muriate of ammonia was obtained in the said factory by a process of manufacture different from that for the manufacture of fertiliser. The Respondent No. 1 claims to have come into possession of information that there were a number of relevant papers, books and documents in the possession of the appellant which were secreted in its Calcutta office. According to Respondent No. 1 again, these papers, books and documents would establish that muriate of ammonia was produced in the said factory in pursuance of a definite programme and that the entries in the books will further show that the contention of New Central Jute Mills Co. Ltd., that there was no separate process in the manufacture of muriate of ammonia was false. These books, it is further alleged, would show that payment of excise duty has been evaded, and further that information will be available from such books regarding Other parties connected with the appellant's transaction with the New Central Jute Mills Co. Ltd. who are involved in the evasion of excise duty. In these facts, the Respondent No. 1 issued an authorisation for search and seizure of the documents and books at the appellant's premises and pursuant to such authorisation, search and seizure took place and the search was conducted at the appellant's business premises at No. 18A, Braboume Road, Calcutta, on May 11, 1968. Various books, documents and papers, which would be useful for the proceedings under the Central Excises and Salt Act and the Central Excise Rules, were seized.;