Rule 26 penalty for employee involvement in clandestine clearance upheld, with reduced penalty based on limited participation.

A paid employee can be penalised under Rule 26 where the evidence shows knowledge of clandestine clearance of excisable goods and cash-based removals, and the role is not limited to routine instructions from superiors. Mere employment status and absence from policy-making do not bar penalty if active awareness and participation are established. The extent of involvement remains relevant to quantum, and mitigation may be reflected by reducing the penalty where the principal offender's penalty has already been reduced under Section 11AC. Penalty was therefore upheld, but reduced to Rs. 25,000.

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Issues: Whether the appellant, described as a paid employee, was liable to penalty for his involvement in the clandestine clearance of excisable goods.

Analysis: The appellant was found to have knowledge of the clandestine activities of the unit and of cash-based clearances, and his role was not confined to routine instructions from superiors. On that basis, the plea that he was merely a paid employee not involved in policy decisions was rejected. At the same time, the extent of his involvement was considered for determining the quantum of penalty, and the reduction granted to the main offender under Section 11AC was taken into account.

Conclusion: Penalty under Rule 26 was held to be imposable, but it was reduced to Rs.25,000/-.

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