Knowledge of confiscable goods is essential for Rule 209A penalty; mere purchase without complicity is insufficient.

Penalty under Rule 209A of the Central Excise Rules, 1944 requires proof that a person knowingly acquired, possessed or dealt with goods liable to confiscation. Mere purchase of a small quantity of goods, without evidence of complicity in the principal offence or the requisite knowledge, is insufficient to attract penal liability. On the facts stated, the purchaser's involvement was not established and the penalty was held unjustified, with the penal order set aside as disproportionate in the absence of proof of culpable knowledge.

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Issues: Whether penalty under Rule 209A of the Central Excise Rules, 1944 was sustainable against a purchaser of a small quantity of goods allegedly liable to confiscation, in the absence of evidence of complicity in the principal offence.

Analysis: The appellant was found to have purchased only five packages of goods. The material on record did not establish that she had acquired, possessed, or sold the goods with the requisite knowledge that they were liable to confiscation, nor did it show her involvement in the offences attributed to the main noticee. On these facts, the finding that she attracted penal liability under Rule 209A could not be sustained, and the penalty of Rs. 10 lakhs was considered disproportionate.

Conclusion: Penalty under Rule 209A was not justified and the appeal was allowed.

Final Conclusion: The penal order was set aside for want of evidence showing the appellant's complicity or knowledge sufficient to attract liability under the rule.

Ratio Decidendi: Penalty under Rule 209A requires evidence that the person knowingly acquired, possessed, or dealt with goods liable to confiscation; mere purchase of goods, without proof of complicity or requisite knowledge, is insufficient.

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