Yes, it is allowed. The severity of the penalty depends on the level of the league, generally. In the NHL, it is 5 minutes for both players, and 2 minutes extra to the guy who started it. There CAN be times when a guy is kicked out if he did something very bad, called a game misconduct, or gross misconduct. But generally it is an accepted part of the game.
YouTube - KO Compilation (Hockey Fights)
YouTube - Unbelievable Hockey Fight
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