Manufacturer-specific penalty provision cannot be invoked against a director; reduced penalty under Rule 209 was sustained.

Section 11AC of the Central Excise Act, 1944 applies to the manufacturer and cannot be used as the basis for penalising a director where the penalty is traceable to Rule 209 of the Central Excise Rules, 1944. On the confined remand, the director's penalty was examined only for Section 11AC applicability, and that provision was found inapplicable to him. The reduced penalty of Rs. 35,000 was therefore correctly sustained, with no further interference warranted.

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Issues: Whether penalty on the director could be sustained under Section 11AC of the Central Excise Act, 1944, and whether the reduced penalty imposed under Rule 209 of the Central Excise Rules, 1944 warranted interference.

Analysis: Section 11AC provides for mandatory penalty in cases involving the manufacturer and is not the source of penalty imposed on the director in this matter. The director's penalty had been imposed under Rule 209 of the Central Excise Rules, 1944, and the remand from the High Court was confined to examining the applicability of Section 11AC in the light of the governing Supreme Court decisions. On that framework, Section 11AC had no application to the director.

Conclusion: The penalty reduced to Rs. 35,000 on the director was correctly sustained and no further interference was called for.

Final Conclusion: The decision affirmed that the manufacturer-specific penalty provision could not be invoked against the director, and the reduced penalty remained undisturbed.

Ratio Decidendi: Section 11AC of the Central Excise Act, 1944 applies to the manufacturer and cannot be used as the basis for penalty on a director where the penalty is traceable to Rule 209 of the Central Excise Rules, 1944.

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