Rule 209A penalty requires a confiscation proposal; absence of such a proposal rendered the penalty unsustainable.

Penalty under Rule 209A of the Central Excise Rules, 1944 was found unsustainable where neither the show-cause notice nor the adjudication order proposed confiscation of the goods. The absence of a confiscation proposal was treated as material to the validity of the penalty, so the penalty against the respondent was dropped and that relief was confirmed. The impugned order was modified only to the extent it affected the other noticee, leaving the respondent protected on the penalty issue.

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Issues: Whether penalty under Rule 209A of the Central Excise Rules, 1944 was sustainable in the absence of any proposal for confiscation of the goods in the show-cause notice or adjudication order.

Analysis: The penalty was imposed on the premise that the goods involved were liable to duty, but the show-cause notice and the adjudication order did not propose confiscation of the impugned goods. The absence of a confiscation proposal was treated as material to the validity of penalty under Rule 209A. The order was also modified to the extent it affected the proceedings against the other noticee.

Conclusion: Penalty under Rule 209A was held not imposable against the respondent in the absence of a confiscation proposal, and the dropping of penalty against the respondent was confirmed.

Final Conclusion: The appeal resulted in a partial modification of the impugned order, with relief retained for the respondent on the penalty issue.

Ratio Decidendi: Penalty under Rule 209A of the Central Excise Rules, 1944 cannot be sustained where the show-cause notice or adjudication order does not propose confiscation of the goods.

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