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Issues: Whether penalties imposed on the employees under Rule 209A of the Central Excise Rules, 1944, Rule 26 of the Central Excise Rules, 2002, and Section 112(b) of the Customs Act, 1962 were sustainable on the facts found against them.
Analysis: The employees were found to have acted in managerial, clerical, or supporting capacities in relation to the alleged clandestine removals. The conduct attributed to them did not show acquisition, possession, dealing with, or intentional handling of excisable or imported goods liable to confiscation, which is the basis for invoking the penal provisions. On the facts recorded, their acts were treated as acts done under instructions of the management and not as conduct attracting personal penal liability under the cited provisions.
Conclusion: The penalties under Rule 209A of the Central Excise Rules, 1944, Rule 26 of the Central Excise Rules, 2002, and Section 112(b) of the Customs Act, 1962 were held to be not attracted and were set aside in favour of the appellants.
Final Conclusion: The appeals succeeded and the penalties imposed on the employees were annulled.
Ratio Decidendi: Personal penalty under these provisions requires conduct amounting to knowing possession, dealing with, or intentional participation in goods liable to confiscation, and mere employment or assistance in the course of management is insufficient.
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