The petitioners are small scale industries undertaking manufacture of parts of arms and ammunition, duly obtaining permission from the concerned authorities of the Government of India. The goods manufactured by them are subject to levy of excise duty. Under the notifications issued by the Government of India in exercise of powers under the Central Excise Act, 1944 (for short ‘the Act’), the goods manufactured by the petitioners were exempted from excise duty upto 28.02.2001. However, the exemption was withdrawn through Notification dated 01.03.2001. On account of the conditions stipulated in Notification No.8/2001, there is no serious financial implication for the petitioners. However, Notification No.47/2001, dated 01.10.2001, was issued amending Notification No.8/2001. On the basis of that notification, the demand notices were issued to the petitioners on 07.11.2001 for payment of basic excise duty @ 16% and special excise duty @ 16% and interest @ 24% for the goods that were cleared between March and April, 2001. The petitioners felt aggrieved by the same and challenged the Notification dated 01.10.2001 insofar as it was proposed to amend Notification No.8/2001 retrospectively.
