B SUBBA RAO Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS writ appeal at the instance of the writ petitioner is to quash the order of the Collector, Central Excise as confirmed by the Central Board of Excise Customs, New Delhi.

(2.) THE Writ Petitioner, who was working as SAS Accountant in the Office of the Accountant General, Hyderabad, formed a Company known as "the Khairatabad Ramprasad Khadi and Village Industries Association" under the Non-Trading Companies Act, 1962. It is stated that the Company consisted of seven Directors, and the Company was carrying on the business of manufacturing match sticks. A show cause notice dated 6. 4. 1972 was issued by the Collector, Central Excise to the Company as well as petitioner stating that on 20. 10. 1971, when the Preventive Officers of Central Excise visited the premises, they found (i) 213 bundless of safety matches containing 5 grosses match boxes, (ii) two gunny bags, one containing 30 grosses match boxes and the other 20 grosses match, boxe, (iii) 17. 5 kgs. of Potasium Chlorate packed in a gunny bag and (iv) one ampty drum of potassium chlorate. Ultimately , it was found that the Association and writ petitioner contravtely the provisions of rules 173-F, 173g (1), 173-G (2), 173-G (4) and 171 (4) of the Central Excise Rules, 1944. The petitioner as well as the Company were called upon to show cause as to why penatly should not be imposed on each of them and the seixed goods should not be confiscated under Rule 173-Q. The petitioner submitted as explanation both on behalf of the Company and also on his behalf. On an appraisal of the relevant material and circumstances, the Collector, Central Excise, Hyderabad held that the petitioner and the association contravened the Rules, and passed orders directing confiscation of seixed match boxes and gunny bages with redemption fine of Rs. 8,000/-, and also imposed a penalty of Rs. 10,000/- on the petitioner and the Association. On appeals by the Petitioner and the Association as well as Central Board of Excise and Customs by an order dated 27. 7. 1974 confirmed the findings and set aside the penalty imposed on the Asociation and confirmed the penalty imposed on the writ petitioner. On revision the quantum of penalty is reduced to Rs. 7,000/ -. The writ petitioner challenged the levy. The learned single Judge, on the interpretation of Rules 173-Q and 221 (2) of the Rules, confirmed the view taken by the appellant authority approved by the revisional authority.

(3.) THE learned counsel for the appellant contends that Rule 173-Q provides for levy of penalty on the Company only as the Company is the licensee or manufcturer and as such the levy of penalty on bot the Company as well as the petitioner or any Officer of the Company is not contemplated by the rules and it amounts to levy twice over for the same contravention. It is further contended that Rule 221 (2) is not concerned with levy of penalty and if Rule 173-Q is considered in isolation the levy of penalty can only be on one entity viz. the Company only.