Director penalty under Rule 209A requires proof of involvement or knowledge, not mere status in the company.

Penalty under Rule 209A of the Central Excise Rules, 1944 cannot be sustained against a director on the basis of mere designation. The tribunal held that liability requires material showing the director's participation in, abetment of, or knowledge of the clandestine removal and duty evasion, or reason to believe the goods were liable to confiscation. Because the record contained no specific evidence linking the director to the offence, the penalty was set aside.

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Issues: Whether penalty under Rule 209A of the Central Excise Rules, 1944 could be sustained against a director in the absence of evidence showing his involvement in or knowledge of the clandestine removal and duty evasion by the company.

Analysis: The penalty was imposed merely because the appellant was one of the directors of the company and was presumed to have played a role in the evasion. The record contained no specific evidence linking him to the clandestine removal or showing that he knew or had reason to believe that the goods were liable to confiscation. Liability under Rule 209A cannot rest on a general assumption that every director is involved in the offence; some material showing participation, abetment, or the required knowledge is necessary.

Conclusion: The penalty was not sustainable and was set aside in favour of the appellant.

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