Knowing possession of goods liable to confiscation is essential for Rule 209A penalty; mere empty containers were insufficient.

Penalty under Rule 209A of the Central Excise Rules, 1944 requires clear evidence that a person knowingly dealt with goods liable to confiscation. Mere presence or possession of empty containers, without corroboration of knowledge or involvement in clandestine clearance, is insufficient to establish the necessary ingredients for penalty. On the facts discussed, the record did not show any admission or reliable material connecting the person to the alleged evasion, so the penalty was considered unjustified and excessive in relation to the containers' negligible value.

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Issues: Whether penalty under Rule 209A of the Central Excise Rules, 1944 was sustainable against a person said to be in possession of empty containers allegedly connected with clandestine clearance of goods.

Analysis: The record did not show any admission by the appellant that she had acquired or possessed the empty containers with knowledge that they were liable to confiscation. Mere presence of empty containers in the premises, without corroboration, was insufficient to establish that she had dealt with the clandestinely removed herbal cream or had any role in its clearance. The materials only showed that the containers were brought to the house by her son and kept there, which did not prove the ingredients required for penalty under Rule 209A. The penalty was also considered excessive in relation to the negligible value of the containers.

Conclusion: The penalty was not justified and was set aside.

Final Conclusion: The appellant succeeded, and the penalty imposed under Rule 209A was annulled for want of evidence connecting her to the alleged evasion.

Ratio Decidendi: Penalty under Rule 209A cannot be sustained unless there is clear evidence that the person knowingly dealt with goods liable to confiscation; mere possession of empty containers, without corroboration, is insufficient.

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