Excise penalty on directors without express statutory basis is unsustainable; jurisdictional show cause notices may be quashed in writ proceedings.

Penal liability under excise law attaches to the manufacturer or producer, and cannot be shifted to directors or officers of a company unless an express statutory provision so provides; on the stated facts, the notice seeking penalty against them was unsustainable. Rule 209A could not be relied on because it came into force after the relevant period and penal provisions cannot operate retrospectively, and the notice failed to plead the facts needed to invoke that rule. A writ petition may be entertained to quash a show cause notice where the challenge is that the authority lacked jurisdiction to issue it at all; a jurisdictional defect justifies interference at the threshold. The notice was quashed against the petitioners, while proceedings could continue against the company.

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Issues: (i) Whether directors and officers of a public limited company could be subjected to penalty under the Central Excise Rules for alleged contraventions by the company. (ii) Whether the writ petition could be entertained to quash a show cause notice issued without jurisdiction.

Issue (i): Whether directors and officers of a public limited company could be subjected to penalty under the Central Excise Rules for alleged contraventions by the company.

Analysis: Liability to pay excise duty and penalty under the charging and penal provisions was fastened on the manufacturer or producer. The company, being the manufacturer, was a separate legal entity, and its liability could not be shifted to directors or executives in the absence of an express statutory provision. Rule 209A could not assist the department because it came into force after the relevant period and penal provisions could not be applied retrospectively. The notice also did not allege the facts required to attract that rule.

Conclusion: The directors and officers were not liable to penalty on the facts stated, and the show cause notice against them was unsustainable.

Issue (ii): Whether the writ petition could be entertained to quash a show cause notice issued without jurisdiction.

Analysis: Where the foundational grievance is that the authority lacked jurisdiction to issue the notice at all, the court need not force the affected parties to undergo the adjudicatory process before the very authority whose jurisdiction is challenged. A jurisdictional defect in the initiation of proceedings is sufficient to invoke writ jurisdiction.

Conclusion: The writ petition was maintainable and the court was justified in interfering with the notice.

Final Conclusion: The impugned show cause notice was quashed as against the petitioners, while the department was left free to proceed against the company.

Ratio Decidendi: Penal liability under excise law cannot be imposed on directors or officers of a company unless the statute expressly so provides, and a jurisdictionally unsustainable show cause notice can be quashed in writ proceedings.

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