Transporter penalty under Central Excise Rule 209A requires knowledge that goods were liable to confiscation.

Rule 209A of the Central Excise Rules, 1944 applies only where a person deals with excisable goods knowing, or having reason to believe, that they are liable to confiscation. Transport companies that merely carried goods booked by third parties could not be penalised in the absence of evidence that they loaded the goods from the manufacturer's premises or knew of their alleged non-duty-paid character. Mere receipt of goods with invoices and goods receipt notes was insufficient to attract the penalty. The penalty against the transporters was therefore held unsustainable and was set aside.

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Issues: Whether penalty under Rule 209A of the Central Excise Rules, 1944 could be imposed on transport companies for carrying goods alleged to have been cleared without payment of duty, in the absence of evidence that they knew or had reason to believe that the goods were liable to confiscation.

Analysis: Rule 209A applies only where a person acquires possession of, or is concerned with transporting, removing, selling, purchasing, or otherwise dealing with excisable goods knowing or having reason to believe that they are liable to confiscation. The appellants were transporters who received the goods through booking from third parties and were concerned with the accompanying invoices and goods receipt notes. There was no material showing that they loaded the goods from the manufacturers' factory premises or that they had knowledge of the alleged non-duty-paid character of the goods. Mere acceptance and carriage of goods for transport, without evidence of knowledge or reason to believe, was insufficient to attract the penal provision.

Conclusion: Penalty under Rule 209A was not sustainable against the appellants, and the order imposing penalty was set aside in their favour.

Ratio Decidendi: A transporter cannot be penalised under Rule 209A of the Central Excise Rules, 1944 unless there is evidence that it knew or had reason to believe that the goods were liable to confiscation.

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