Personal penalty under central excise law fails when the duty demand is dropped and the trader is not the manufacturer.

Personal penalty under Rule 209A of the Central Excise Rules was held unsustainable where the noticee was only a trader and not the manufacturer of the seized goods. Once the appellate authority had already dropped the duty demand and found that no duty could be confirmed against him, the foundation for imposing a personal penalty ceased to exist. On those facts, the alleged absence of duty-paying documents did not justify penalty, and the penalty was set aside.

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Issues: Whether personal penalty under Rule 209A of the Central Excise Rules was sustainable against a trader when the duty demand against him had been dropped.

Analysis: The appellant was only a trader and not the manufacturer of the seized goods. Once the appellate authority had held that no duty could be confirmed against him and had dropped the duty demand, the basis for imposing personal penalty did not survive. On these facts, there was no justification for penalty merely because the goods were alleged to be without duty-paying documents.

Conclusion: The penalty under Rule 209A was not sustainable and was set aside in favour of the appellant.

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