Penalty for aiding clandestine clearances may stand, but quantum can be reduced where involvement and gain are limited.

Rule 26 penalty may be sustained against a commission agent who knowingly assists clandestine removal of excisable goods without payment of duty. The note states that association with documents showing evasion, together with the manufacturer's admission and duty payment, supported a finding of aiding and abetting. It also notes that the quantum of penalty can be moderated on facts where the person's involvement and gain are limited; here, the reduced commission was treated as relevant, and the penalty was lowered from a higher amount to a nominal figure.

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Issues: Whether penalty imposed under Rule 26 was sustainable against a commission agent alleged to have aided and abetted clandestine clearances, and whether the quantum of penalty required reduction.

Analysis: The appellant was found to have acted as a commission agent in procuring orders for the manufacturer and was associated with documents indicating clandestine clearances without payment of duty. The manufacturer had ed the clandestine activity and discharged duty with penalty, supporting the finding that the appellant had assisted in the evasion. However, the appellant's stated commission from the transactions was only Rs. 30,000, which was relevant to the extent of penalty.

Conclusion: Penalty under Rule 26 was upheld, but the amount was reduced from Rs. 1.50 lakhs to Rs. 25,000, making the appeal only partly successful.

Final Conclusion: The finding of liability to penalty was sustained, but the punishment was moderated to a lesser amount.

Ratio Decidendi: A person who knowingly assists clandestine removal of excisable goods is liable to penalty under Rule 26, but the quantum may be reduced on facts where the extent of involvement and gain is limited.

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