Manufacturers must adhere to excise duty regulations for clearing goods, proving their product's classification as excisable.

1Petitioners are small scale undertakings engaged in fabrication of various Line Materials such as cross arms, etc. They have challenged Ext. P3 order of the Assistant Commissioner informing the petitioners that they must clear the goods only after observing Central Excise formalities as per the Central Excise Act and Rules and, therefore, goods shall not be cleared on execution of bond.

2The case of the petitioners is that their factory premises as well as the residence of the partners of the units were inspected on 31.10.1996 by the Central Excise Department staff headed by the Superintendent of Central Excise. The factory once again was inspected on 1.11.1996 and after ascertaining the total quantity of cross arms that were lying in stock, issued a detention order in respect of the same and directed the petitioners not to remove, part with or otherwise deal with the detained goods without prior permission from the Department Thereafter, the petitioner approached the respondent and sought for permission to clear the goods provisionally after executing a bond for the alleged duty liability. The said request was turned down and hence the above Original Petitions were filed.

3According to learned counsel for the petitioners the demand of the Assistant Commissioner to pay duty is arbitrary and illegal and violative of their fundamental rights of an assessee under Art.14 of the Constitution of India. According to him, the Central Excise Department is not entitled to demand duty without adjudication and in any event they must be allowed to clear the goods on execution of a bond as it had been done in the case of the petitioner in OP No. 617 of 1997 as per the directions of this Court in OP No. 20386 of 1996. Learned Counsel for the petitioners also submitted that the cross arms are not excisable in so far as the fabrication work done in respect of the cross arms cannot be said to be one that tantamounts to manufacture.

4A counter affidavit has been filed on behalf of the respondents. It is stated that the Original Petitions are premature and the filing of the Original Petitions are abuse of the process of this Court. He stated that there is no provision under the Act and Rules to permit a manufacturer to clear dutiable goods for domestic use without payment of duty on execution of a bond. It is further stated that a search was conducted at the premises of the petitioners at Athani on 31.10.1996 on the belief that excisable goods have been cleared by the unit without observing the Central Excise procedures, even though, the ceiling for SSI exemption has been crossed by the petitioners. No documents were maintained at the premises. A simultaneous search at the office premises of the factory at Ernakulam revealed various documents evidencing clearance of excisable goods and it was found that the unit had crossed the limit for SSI exemption. Therefore, on 1.11.1996, the officers of the Department visited the factory premises of the petitioners and detained the goods lying in the factory and handed over to the petitioner immediately. Subsequently the petitioners were advised by the Department to take the release of the goods provisionally on execution of a bond in proper form with sufficient security by communication dated 5.12.1996. Not being satisfied with the said letter, the petitioners moved this Court OP Nos. 20386 and 20385 of 1996 and got a direction for the release of the goods on condition of executing a bond with an undertaking that they will be paid duty as may be payable. The petitioners had stated before this Court that items in Ext. P1 are subject to adjudication by the respondents. It is clearly stated that the goods already detained had been released. The respondents stated that the goods that were manufactured in the factory are excisable. As per the Central Excise Rules goods cannot be cleared on execution of a bond and the petitioners cannot claim any exemption from the usual formalities. It is stated that the petition