JUDGMENT - M.L. PENDSE, J.:---The short question which falls for determination in this petition filed under Article 226 of the Constitution of India is whether Directors and Officers of a Public Limited Company can be made liable for levy of penalty under Rule 9(2) and Rule 173Q(1) of the Central Excise Rules, 1944. Only few facts are required to be stated to appreciate the grievance of the petitioners.

The petitioners are Directors/Executives of Kirloskar Brothers Limited which is a Public Limited Company registered under the Companies Act. The Company is engaged in manufacturing activities and, inter alia, manufactures Hermetic Compressors which are liable for payment of excise duty under Central Excise and Salt Act, 1944. On January 15, 1986, the Collector of Central Excise and Customs, Pune served show cause notice upon the Company and the petitioners to explain why penalty should not be imposed under Rule 9(2) and Rule 173Q(1) of the Central Excise Rules. The notice, inter alia, recites that the Company had contravened the provisions of Rule 173(C)(1) of the Rules by suppressing and failing to declare in the price list full particulars of the value realised in respect of clearance of Hermetic Compressors manufactured and cleared during January 1, 1981 and ending with November 30, 1985. The notice further recites that the Company and the Directors and Executives have contravened the provisions of Rule 173F read with Rule 9(1), Rule 173G(2) of the Central Excise Rules, 1944 by clearing excisable goods without correctly determining and paying the duty liability thereon. The notice further recites that the Company and all Directors and employees mentioned in the show cause notice are called upon to explain to the Collector of Central Excise, Pune, why penalty should not be imposed and as to why Central Excise duty amounting to Rs. 5,43,52,819.14 should not be recovered from the Company. The petition is filed by the Directors and the Executives to challenge the service of show cause notice.

2. Shri Andhyarujina, learned Counsel appearing on behalf of the petitioners, submitted that the Collector of Central Excise had no jurisdiction to serve show cause notice upon the petitioners as the petitioners are neither manufacturers nor producers of excisable goods cleared from the factory between January 1, 1981 and November 30, 1985. The learned Counsel urged that the notice is issued on the assumption that the Directors and the Executives of the Public Limited Company are the manufacturers and are liable to payment of excise duty under section 3 of the Central Excise Act. The submission is correct and deserves acceptance . Section 3 of the Central Excise Act is a charging section and provides that there shall be levied and collected duties of excise on all excisable goods at the rates, set forth in the Schedule to the Central Excise Tariff Act, 1985. The expression 'manufacture' is defined under section 2(f) of the Act and includes any process, incidental or ancillary to the completion of a manufactured product. The word 'manufacture', provides section 2(f) of the Act, shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in the production or manufacture on his own account. Rule 7 in Chapter III of the Central Excise Rules provides that every person who produces, or manufactures any excisable goods, shall pay the duty leviable on such goods. Rule 9(2) then prescribes that if any excisable goods are in contravention of sub-rule (1), removed from any place specified therein, then the producer or manufacturer thereof shall pay the duty leviable on such goods upon written demand made by the proper officer, and shall also be liable to penalty. Rule 173Q provides for levy of penalty on manufacturer or producer and sub-rule (2) provides for the mode of levy and rate of penalty. Referring to these relevant provisions, Sh

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