P. Rama Rao, J.
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.
4. The learned Standing Counsel for the Central Governmenmt contends that ultimately the collection of penalty from the petitioner only is sustained and therefore there is no double levy.
5. Rule 173-Q to the extant relevant is as follows :- '173-Q. Confiscation and penalt. (1) If any manufacturer, producer contravention of a Warehouse, (a) removes any excisable goods in contravention od any of the provisions of these rules, or (b) does not account for any excisable goods manufactuted, produced or stored by him, or (c) engages in the manufacture, production or storage of any excisable goods without having applied for the licence required under Section 6 of the Act, or (d) contravenes any of the provisions of these rules with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the manufacturer, producer or licensee of the warehouse, as the case may be, shall be liable to a penalty not exceeding three times the value of the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or five thousand rupees, whichever is greater.' '(2) Any person signing a declaration, and also the corporation under whose seal the declaration is made, shall be liable for the payment of all duties charged and to all penalties and confiscations incurred, in respect of the trade or business to which the declaration relates.'
It is true, as contended by the learned counsel for the appellant, the Rule 173-Q alone is concerned with confiscation and levy of penalty in the event of contravention of the rules. Rule 173-Q contemplates levy of penalty on a manufacturer, producer or licensee and the Company is liable for confiscation and penalty. It must be stated that the order of the primary authority in the instant case seeking to levy penalty on Corporation as well as the petitioner, the president of the company, is not visualised by Tule 173-Q and such action is tantamount to levy of penalty twice over for the same contravention. This infirmity in the order of the primary authority is regularised by the appellate authority by confining the penalty to the petitioner alone. The learned counsel treating this order as levy of penalty contended that the Company alone is liable for levy of penalty and the petitioner in any event cannot be implicated with such liablity.
6. Rule 173-Q provides for confiscation and levy of penalty on the producer, manufacturer or the licensee and it cannot be controverted that the company is the manufacturer or the licensee and the penalty can be levied on the company alone. Rule 221(2) is concerned with collection of duties and penalties. This rule fastens liability on the Corporation considered as an entity carrying on the business and also the person signing the declaration. The combined reading of Rule 173-Q and Rules 221(1) and (2) indicates that Rule 173 relates to levy of penalty on the person or entily who is considered as manufacturer or producer and Rule 221(1) and (2) authorises collection of penalty from the corporation as well as the person singing the declaration on behalf of the company. There is no conflict or overlapping between the rules and they operate in different spheres. Rule 173-Q is concerned with the levy of penalty and Rule 221 facilitates the collection of such penalty from the Company as well as person signing the declaration on behalf of the company. The expression employed in Rule 221(2) is payment only as distinct from liability under Rule 173-Q, Rule 221 is only supplementary to Rule 173--Q and it does not have an independent existence or status. The person signing declaration in conformity with Rule 221 is making himself liable for payment of duties and this can be considered in the nature of surety or joint and several liability. The order of the appellate authority in the circumstances should be considered as making the petitioner laibel for payment of penalty.
7. In the result the order of the learned single Judge is confirmed. Writ Appeal dismisse. No. costs. Advocate fee Rs. 150/-.