1985 (11) TMI 67 - HC - Central Excise

Summary

Issues:
Levy of penalty on the Company and the petitioner, Interpretation of Rules 173-Q and 221(2) regarding penalty imposition.

Analysis:
The case involved a writ appeal challenging the order of the Collector, Central Excise, and subsequent confirmation by the Central Board of Excise and Customs regarding the levy of penalty on a Company and the petitioner for contravening Central Excise Rules. The petitioner, a SAS Accountant, formed a Company engaged in manufacturing match sticks. The Collector found contravention of various rules and imposed penalties and confiscation of goods. The Central Board confirmed the penalties, leading to the writ appeal. The main contention was whether the penalty could be imposed on both the Company and the petitioner under Rule 173-Q.

The appellant argued that Rule 173-Q only allows penalty imposition on the Company, not on individuals associated with the Company. The Standing Counsel for the Central Government contended that since the penalty was ultimately collected from the petitioner alone, there was no double levy. Rule 173-Q was examined, which states that penalties can be imposed on the manufacturer, producer, or licensee. The primary authority's decision to levy penalties on both the Corporation and the petitioner was deemed irregular, rectified by the appellate authority to impose the penalty on the petitioner alone.

Further analysis revealed that Rule 221(2) pertains to the collection of duties and penalties, holding both the corporation and the person signing the declaration liable. The rules were interpreted to show that Rule 173-Q focuses on penalty imposition on the manufacturer or producer, while Rule 221 complements it by enabling penalty collection from the corporation and the person signing the declaration. The appellate authority's decision was justified as making the petitioner liable for penalty payment, aligning with the rules' provisions.

Ultimately, the learned single Judge's decision was upheld, confirming the imposition of penalties on the petitioner. The writ appeal was dismissed, with no costs awarded. The legal fees were set at Rs. 150.