The Delhi High Court has issued notice on a writ petition challenging the constitutional validity of certain provisions of the Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026.
The petition questions whether the government can mandate installation of CCTV cameras and long-term storage of surveillance footage as part of excise compliance requirements.
The matter was heard by a Division Bench comprising Justice Nitin Wasudeo Sambre and Justice Ajay Digpaul on February 24, 2026. The Court has sought a response from the Union Government and listed the case for further hearing on July 8, 2026.
Challenge to Rules Under Central Excise Law
The petitioner, a manufacturer of chewing tobacco governed by the Central Excise Act, 1944, challenged Rules 16 and 22(3) of the 2026 Rules. These provisions prescribe compliance requirements for manufacturers operating packing machines, including obligations relating to surveillance systems and procedural compliance.
The petition primarily seeks a declaration that these rules are ultra vires Section 3A of the Central Excise Act and violate Article 14 of the Constitution on the ground of arbitrariness and lack of nexus with the object of the law.
Dispute Over CCTV Installation Requirement
A key issue raised in the petition is the requirement for manufacturers to install CCTV cameras and retain footage for up to 24 months. The petitioner argued that Section 3A of the Central Excise Act, which allows duty to be levied on the basis of production capacity, does not authorize the government to impose surveillance-related obligations.
It was contended that the statutory provision only permits rules relating to determination of production capacity and duty calculation, and does not extend to conditions such as mandatory CCTV installation or disclosure of surveillance details in prescribed forms.
Reliance on Supreme Court Precedent
To support the challenge to subordinate legislation, the petitioner relied on the principles laid down by the Supreme Court of India in State of Tamil Nadu v. P. Krishnamurthy, which sets out grounds on which delegated legislation can be struck down. These include lack of legislative competence, violation of constitutional provisions, and manifest arbitrariness.
The petitioner argued that the impugned rules exceed the authority granted under the parent statute and therefore fail the test laid down by the Supreme Court.
On behalf of the Union Government, counsel submitted that instructions were awaited but indicated that the rules were introduced to ensure proper monitoring and to maintain checks and balances in the manufacturing and production process. The government is expected to argue that the provisions fall within the rule-making powers under Section 3A.
The Court was also informed that a similar issue concerning the validity of these provisions is pending before another High Court, indicating that the dispute may have wider implications for the tobacco manufacturing sector across the country.
Case Details
Case Title: M/S A.T. Tobacco Versus Union Of India & Ors.
Case No.: W.P.(C) 2566/2026
Date: 24.02.2026
Counsel For Petitioner: Naveen Rohila
Counsel For Respondent: Ankur Mittal
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