2006 (4) TMI 138

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....of the petitioner No. 1-Company, are visited with penalty of Rs. 25000/- and Rs. 10,000/- respectively, in terms of Rule 173Q(1) of the Central Excise Rules, 1944. In the alternative, the petitioners have prayed that Rules 221 and 225 of the Central Excise Rules, 1944 be declared ultra vires the provisions of the Central Excises and Salt Act, 1944. 2. The petitioner is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of manufacturing "forgings and forged" products. The forgings are products made by roughly shaping the steel by the process of rolling or forging. Prior to August 1, 1983, Tariff Item 26AA(ia) of the erstwhile First Schedule to the Act specifically covered "forged or rolle....

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....ntral Excise visited the premises of the petitioner No. 1-Company and effected large scale seizure of the forgings for railway-tyres. As a consequence of seizure, a show-cause notice was issued claiming that forgings for tyres fell under Chapter Heading 86.07 and not under Chapter Heading 72.08. The petitioners filed reply and contested the claim advanced in the show-cause notice. However, the Collector vide order dated January 31, 1990 confirmed the show-cause notice and imposed penalty of Rs. 15 lakhs on the petitioner No. l as well as penalty of Rs. 25,000/- and Rs. 10,000/- respectively on the petitioner Nos. 2 and 3. The imposition of penalty on the petitioner Nos. 2 and 3 is subject matter of challenge in the instant petition. 3. T....

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....at, Assistant Manager (Excise) of the petitioner No. 1, with annexures, was served on the learned counsel for the respondents. No affidavit-in-reply has been filed on behalf of the respondents controverting the averments made in the affidavit filed by Mr. Dilip C. Sampat, Assistant Manager (Excise) of the petitioner No. 1-Company on March 27, 2006. As the appeal filed by the company is allowed by the Tribunal by setting aside the order of Collector, Central Excise, Rajkot, and confirmed by the Supreme Court, this Court is of the opinion that penalty imposed on the petitioner Nos. 2 and 3 cannot be sustained. Mr. J. M. Malkan, learned Assistant Solicitor General of India, on instructions, states at the Bar that the order passed by the Collec....