1. ' MUHAMMAD HALEEM, J.-The facts for the decision of this petition are that the petitioner is the owner of the Jubilee Spinning & Weaving Mills, situated at B/28, S. I. T. B., Karachi, where cloth is manufactured. At 3 p.m. On 3rd June 1970, the Intelligence Staff of the Karachi Excise and Land Customs visited the premises and noticed 300 looms out of which 298 were working while the other two were closed. On inspection of the register of production capacity they further noticed the entry of 268 looms instead of 300. Accordingly, a show-cause notice was sent on the 8th August 1970, calling upon the petitioners to show cause as to why action should not be taken against them under rules 57, 210 and 226 of the Central Excise Rules, 1944. The petitioners submitted a reply to the show-cause notice on 19th August 1970, but the explanation was not accepted and by order dated 22nd April 1971, the third respondent imposed penalty of rupees live lacs for the violation of rule 226(2) (3) of the rules. Being thus aggrieved the petitioners went in appeal but the second respondent rejected it by order dated 24th January 1973. The petitioners then filed this petition on 5th June 1973, and at the same time also preferred a revision before the first respondent on 12th March 1973. The first respondent allowed the revision, to the extent that the penalty was reduced from five lacs to Rs, 50,000. The petitioners then filed the amended petition and impugned the quantum of reduced fine. Since the quantum of fine is the only issue for decision before, us it would be of relevance to reproduce the relevant portions of the order of the first respondent as under : "Both these letters were addressed to the Superintendent and sent by post. The first letter was not traced out in the Superintendent's Office. The second letter was stamped 29-5-70, but was delivered by the postal authorities on 6-6-1970. The significant thing about these letters is that the copies were procured from the head office and produced before the intelligence Staff on 3.6-70 at the mills premises. These letters, cannot, therefore, be taken as afterthought or drawn up after the raid was over on any subsequent day. However, it was the duty of the manufacturer to ensure that intimation under rule 45 had been duly received in the Superintendent's Office. The default of entry in the Production Register regarding 30 new looms is conceded.
2. ' Considering all the circumstances of the case, the Federal Government is satisfied that the new looms were installed in the months of April and May 1970, which actually went into production from 1-6-70, and duty is rightly chargeable w,e,f, this date. No duty on 30 looms-should be charged from a prior date.
3. ' So far as other defaults of non-intimation and non-entry in the register etc. Are concerned, a penalty of R s. 50,000 would be adequate. The quantum of penalty shall be reduced accordingly."
4. ' The penalty stands for non-intimation under rule 57 and for non-entry in the register under rule 226(2) (3) of the Rules. The learned counsel for the petitioner contends that the non-intimation being a single offence, the penalty could not exceed Rs, 2,000 under rule 57 while under rule 226(2)
(3) the amount imposed could either be Rs, 2,000 or ten times the duty payable, which according to him was Rs, 806.50 for the two days on which the 30 looms worked, whichever is greater. The duty payable was not denied at the Bar. Therefore, the only amount that could be imposed as penalty was Rs, 8,065 and in all the penalty could not exceed Rs, 10,065.
5. ' Mr. Yousuf Rafi, learned counsel for the respondents vehemently urged that the words "each offence" in rule 57 convey the meaning of non-intimation qua each loom. Rule 57 being a penalty provision it has to be strictly construed. The opening words of clause (a) of rule 57 provide the gist of the offence, namely, "without giving due notice as prescribed by rule 45" and what rule 45 states is that the addition to any declared premises can be made only after giving to the proper officer 14 days' previous notice in writing, specifying the addition. Therefore it is the non-intimation of the addition which is regarded as an offence and if several such intimations were required to be given in regard to other changes enumerated therein then for each non-intimation the petitioner was liable to be mulcted with penalty as each of such change constituted an offence. We are, therefore, unable to agree to the submission that the words 'each offence' would mean non-intimation of the addition of each loom. In this view of the matter the penalty in excess of Rs, 2,000 could not have been levied under rule 57. As for rule 226(2) (3) it was conceded by the petitioners that no entry was made in the prescribed register and, therefore, the maximum penalty which could be A imposed was Rs, 8,065. Therefore, the Central Government could not impose a higher penalty than the two added amounts. Accordingly we would declared the imposition of the penalty in excess of the amount of Rs, 10,065 a without lawful authority and of no effect and accept the petition but with no order as to costs.
6. ' The learned counsel for the petitioner has deposited Rs, 50,000 in Court. The difference in the amount may be returned to the petitioner.
7. ' M. A. RASHID, J.-I agree.