Decided on September 12,2002

UNION OF INDIA Respondents


- (1.)MR Rajiv Nanda, learned counsel appears on behalf of the Union of India and states, on instructions that the power would be filed by next Tuesday. Upon such an undertaking, the matter is taken up for hearing with due opportunity of hearing to the Union of India as well.
(2.)PRESENTLY , the matter under consideration involves a short question as regards the true effect of Rule 221 read with Rule 3 of the Central Excise Rules, 1944 (for short "the Rules"). For convenience sake, Rule 221 and Rule
Are noticed hereinbelow:

"221. Responsibility of a corporate body for making declaration and obtaining registration certificate.-(1) Where any trade or business in respect of which declaration is required to be made by these Rules, is carried on by a corporation, the declaration shall be under the seal of the corporation and signed by the Chairman or some Director of the corporation or by its secretary or other principal officer. (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. (3) A declaration in respect of a trade or business carried on by a corporation shall be treated as being under the seal of the corporation if it is signed by some person authorised in that behalf by the corporation under its seal."

"3. Agent of owner of goods, factory or wArehouse to be deemed owner for certain purposes.-When any person is expressly or impliedly authorised by the owner of any goods, factory or wArehouse to be his agent in respect of such goods, factory or wArehouse for all or any of the purposes of these rules and such authorisation is approved by the Commissioner, such person shall, for such purposes, be deemed to be the owner of such goods, factory or wArehouse."
3. Mr. Das, learned counsel appearing in support of the appeals, has been rather emphatic in his submission that considering the language of Rule 3, question of any liability being fastened on to the Managing Director by reason of the applicability of the declaration in terms of Rule 221 would not arise. The learned Additional Sessions Judge as also the High Court negatived the plea upon consideration and the High Court has found cogent reasons therefor.
(3.)WE ourselves thought it prudent to examine the issue under consideration and on close scrutiny of the Rules, we are, however, unable to record our concurrence with the submissions of Mr. Das. The obligation under Rule 221 is an independent obligation without being inhibited by the provisions under Rule 3. Rule 221 is in the form of the declaration for compliance with the required formalities as is envisaged under the law.

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