1 Mr. Rajiv Nanda, learned counsel appears on behalf of 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. 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 3 are noticed hereinbelow:-

"Rule 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.

"Rule 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."

4. Mr. Das, learned counsel appearing in support of the appeals, has been rather emphatic in his submission that considering the language of Rule 13, 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

5. Sessions Judge as also the High Court negatived the plea upon consideration and the High Court has found cogent reasons therefor.

6. 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.

7. Rule 3 is a mere authorisation. So once a declaration is signed by the Managing Director, the force of law will be operative till such time a fresh declaration is filed by reason of the authorisation in terms of Rule 3 whereas Mr. Das contended that by reason of the operation of Rule 3 once there is an authorisation, it should be treated as the end of the chapter so as to absolve the declarant from all responsibility.

8. We are, however, unable to record our concurrence therewith. Rule 221, as noticed above, casts a strict obligation and cannot be diverted to any other person without there being a specific declaration to that effect in terms of the Rule and the same continues till the specific authorisation since the liability for compliance stands vested with the person who is acting as the declarant.

9. The High Court has not only dealt with the issue in a proper perspective but also referred to Rule 225 wherein the responsibility of the keeper of the warehouse exists and that responsibility would entail the consequences of liability to be dealt with in accordance with the provisions of the Central Excise and Salt Act or The Rules made thereunder as if he had removed the goods himself.

10. This is an onerous responsibility and hence Rule 225 has to be read with Rule 221 in order to give the intent of the law makers its statutory efficacy.

11. On the wake of the aforesaid, we are unable to record our concurrence with the submissions made in support of the appeals. The appeals, therefore, fail and are dismissed accordingly.