Penalty under Rule 173Q requires cogent evidence linking seized goods to the person proceeded against; transporter's letter alone was insufficient.

Penalty under Rule 173Q of the Central Excise Rules, 1944 could not be sustained where seized goods were found at a transporter's premises and the appellant had consistently denied any connection with them as manufacturer or trader. The adjudicating authority was required to examine that denial after remand, but instead confirmed penalty on the basis of the transporter's request for provisional release. That request did not establish that it was made at the appellant's instance, and no cogent evidence linked the goods to the appellant or showed that they had been cleared by it. In the absence of such linkage, penalty was legally untenable.

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Issues: Whether penalty under Rule 173Q of the Central Excise Rules, 1944 could be imposed on the appellant when the appellant had consistently disowned the seized goods and there was no evidence linking those goods to the appellant.

Analysis: The goods were seized from the premises of a transporter, not from the appellant's factory or depot. The appellant had denied any connection with the goods from the beginning, both as manufacturer and as trader. The earlier remand required the adjudicating authority to examine this plea, but the plea was not addressed and the penalty was confirmed merely with reference to the transporter's letter seeking provisional release of the goods. That letter did not show that it was written at the appellant's behest, and there was no material to establish that the goods had been cleared by the appellant or were otherwise attributable to it.

Conclusion: Penalty under Rule 173Q could not be legally imposed on the appellant.

Ratio Decidendi: Penalty cannot be sustained under Rule 173Q unless there is cogent evidence connecting the goods with the person proceeded against; a mere transporter's request for release, without proof of the appellant's linkage to the goods, is insufficient.

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