( 1 ) A series of writ petitions have been filed challenging the vires of levy of excise duty on goods and materials obtained by breaking up of ships, boats and other floating structures. The case of the petitioners is that the petitioner purchases old ships and vessels for breaking up these old ships and vessels imported by the petitioner after due observance of all formalities including payment of customs duty. After the dismantling of the ships and vessels, the dismantled portions are sold to different purchasers. It has been argued on behalf of the petitioners that the dismantling of old ships and vessels does not involve any manufacturing at all.

( 2 ) IT has been stated on behalf of the petitioners that the petitioners have to pay customs duty at the rate prevailing at the time of first importation of the vessels. In addition to basic duty of customs, countervailing duty by way of additional duty equal to excise duty had been levied and imposed upon the imported old ships and vessels under Section 3 of the Customs Tariff Act, 1975.

( 3 ) THE petitioners' grievance is that the Central Excise authorities without having regard to the levy of customs duty and cou