Separate penalty on directors sustained where evidence showed conscious knowledge of clandestine removal and invoice-less clearances.

Separate penalty on directors under Rule 26 is sustainable where the record shows conscious knowledge of, or participation in, the company's clandestine removal of excisable goods. Seized incriminating documents, the panchnama and the directors' statements were treated as material showing awareness of unaccounted clearances and removals without invoices. The underlying finding of clandestine removal against the company also remained undisturbed, and the penalties on the directors were upheld.

---

---

Issues: Whether penalties imposed on the directors under Rule 26 of the Central Excise Rules were justified on the basis that they were aware of and in the clandestine removal of excisable goods by the company.

Analysis: Separate penalty on directors is permissible where there is material showing their role in, or knowledge of, the clandestine activities of the company. The seized incriminating documents, the panchnama, and the statements of both directors indicated that they were aware of the unaccounted clearances and had ed the contents of the documents and the fact of clearance without invoices. The finding of clandestine removal against the company also remained undisturbed in view of the dismissal of the company's appeal for non-compliance.

Conclusion: The penalties on the directors were rightly sustained and the appeals were rejected.

Ratio Decidendi: A director can be visited with a separate penalty for clandestine removal where the record shows conscious knowledge of, or participation in, the evasion by the company.

---