Rule 26 penalty can stand without an express confiscation proposal when knowledge and dealing in offending excisable goods are proved.

Penalty under Rule 26 of the Central Excise Rules, 2002 may be imposed on a person who knowingly acquires, transports, removes, keeps, conceals, sells or otherwise deals with excisable goods liable to confiscation. An express confiscation proposal in the show cause notice is not a prerequisite where the evidence establishes clandestine removal, offending dealings and the person's active role with the requisite knowledge. On the facts discussed, the Tribunal relied on seized records, statements and surrounding material, and the absence of a specific confiscation proposal did not defeat the penalty. The challenge to the order as non-speaking also failed because the concurrent factual findings showed no perversity.

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Issues: Whether penalty under Rule 26 of the Central Excise Rules, 2002 could be sustained against a director concerned with removal and dealing in excisable goods, and whether the absence of an express confiscation proposal in the show cause notice defeated such penalty.

Analysis: Rule 26 is attracted where a person acquires, transports, removes, keeps, conceals, sells or otherwise deals with excisable goods knowing or having reason to believe that they are liable to confiscation. The finding of liability does not depend on an express confiscation order in the notice if the goods are shown, on the evidence, to have been involved in clandestine removal and other offending dealings. The Tribunal had examined the seized records, statements and surrounding material, attributed an active role to the appellant, and reduced the penalty proportionately after reducing the duty demand. The challenge that the order was non-speaking did not dislodge the concurrent factual findings or show any perversity.

Conclusion: The penalty under Rule 26 was validly upheld and the appeal failed.

Ratio Decidendi: Penalty under Rule 26 of the Central Excise Rules, 2002 is maintainable against a person knowingly concerned with dealing in excisable goods liable to confiscation, and an express confiscation proposal in the notice is not a prerequisite where the offending conduct and knowledge are established on evidence.

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