Rule 209A penalty requires evidence of involvement and knowledge that goods were liable to confiscation; penalty set aside.

Penalty under Rule 209A of the Central Excise Rules, 1944 was unsustainable because the record did not show the appellant's involvement in the management, sale, purchase, finance, removal, or disposal of excisable goods liable to confiscation. The evidence indicated that the plant manager was in overall charge of the unit and that the appellant was only attending board meetings. No material established that he was concerned with the impugned transactions or that he knew, or had reason to believe, the goods were liable to confiscation. The penalty was therefore set aside.

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Issues: Whether penalty under Rule 209A of the Central Excise Rules, 1944 was sustainable in the absence of evidence showing the appellant's involvement in the affairs of the company or in the dealing, sale or disposal of goods liable to confiscation.

Analysis: The statements on record did not implicate the appellant in the management, sale, purchase, finance, or removal of the excisable goods. The evidence showed that the plant manager was in overall charge of the unit, while the appellant was only attending board meetings. No material established that he was concerned with the impugned transactions or had knowledge, or reason to believe, that the goods were liable to confiscation. In the absence of such evidence, the statutory basis for imposing penalty was not made out.

Conclusion: The penalty under Rule 209A was not justified and was set aside, with the appeal allowed.

Ratio Decidendi: Penalty under Rule 209A of the Central Excise Rules, 1944 cannot be imposed unless there is cogent evidence that the was concerned with the excisable goods in the manner contemplated by the rule and knew or had reason to believe that they were liable to confiscation.

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