Penalty under Rule 209A requires findings on excisable goods and knowledge of confiscation liability; penalty set aside.

Penalty under Rule 209A of the Central Excise Rules, 1944 requires proof that a person dealt with excisable goods knowing or having reason to believe that they were liable to confiscation. The adjudicating authority had not recorded findings that the goods were excisable, that they were liable to confiscation, or that the appellant knew or had reason to believe that position. In the absence of these essential findings, the statutory conditions for invoking the penal provision were not met, and the penalty was set aside.

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Issues: Whether penalty under Rule 209A of the Central Excise Rules, 1944 was sustainable in the absence of findings that the goods were excisable or liable to confiscation and that the appellant knew or had reason to believe that position.

Analysis: Rule 209A requires proof that a person acquired, possessed, transported, removed, deposited, kept or purchased excisable goods knowing or having reason to believe that they were liable to confiscation. The adjudicating authority did not record a finding that the goods in question were excisable or that they were liable to confiscation. It also failed to find that the appellant knew or had reason to believe that the goods were liable to confiscation. Without these essential findings, the statutory requirements for invoking the penal provision were not satisfied.

Conclusion: Penalty under Rule 209A was not sustainable and was set aside in favour of the assessee.

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