Penalty for alleged excise contravention fails where entry of machines into the factory is not proved by evidence.

Penalty for alleged contravention of Rule 51A of the Central Excise Rules, 1944 was held unsustainable because the alleged movement of ten power press machines into the factory was not proved by evidence. The only foundation for the penalty was the assertion that the machines were brought into the factory and then sold, but no material established that they had in fact entered the premises. On those facts, the trading transaction alone could not support a finding of contravention, and the penalty was set aside in favour of the assessee.

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Issues: Whether penalty imposed for alleged contravention of Rule 51A of the Central Excise Rules, 1944 was sustainable in the absence of evidence that the machines were brought into the factory.

Analysis: The only basis for the penalty was the allegation that ten power press machines were brought into the factory and sold thereafter. No evidence was produced to show that the machines had actually been brought into the factory. On the facts recorded, the contravention of Rule 51A was not established, and the penalty could not rest merely on the trading transaction.

Conclusion: The penalty was unsustainable and the issue was decided in favour of the assessee.

Ratio Decidendi: Penalty under the Central Excise Rules cannot be sustained unless the alleged contravention is proved by evidence.

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