1990 (3) TMI 77 - HC - Central Excise

Summary

Issues:
1. Whether a manufacturer of goods listed in the First Schedule of the Central Excise Tariff Act is required to obtain a license under Section 6 of the Central Excises & Salt Act.
2. Whether exemption from payment of excise duty on certain goods absolves the manufacturer from the obligation to obtain a license.
3. Whether a search and seizure conducted by the Central Excise Department constitutes coercive action.

Analysis:
1. The petitioner, a manufacturer of spectacle frames, claimed that their goods fell under a tariff sub-heading exempt from duty. However, they had operated without a license under Section 6 of the Central Excises and Salt Act. The Court held that manufacturing goods listed in the First Schedule of the Tariff Act necessitates obtaining a license, irrespective of duty exemption.

2. The petitioner cited a ruling from the Allahabad High Court, arguing that duty exemption obviated the need for a license. The Court distinguished the ruling, emphasizing that exemption from duty does not negate the requirement for a license under Section 6 or Rule 174 of the Central Excise Rules. Licensing is essential for revenue control, regardless of duty exemptions.

3. The Court rejected the petitioner's claim of coercion due to a search and seizure, noting that the petitioner, a company, had ample opportunity to defend against prosecution for operating without a license. The Court emphasized that fear of prosecution does not justify obtaining a license under duress. The petitioner's failure to obtain a license as required by law led to the dismissal of the writ petitions.