Rule 209A penalty requires dealing in confiscable excisable goods; fake gate passes alone were insufficient and the penalty was set aside.

Penalty under Rule 209A of the Central Excise Rules, 1944 requires proof that a person acquired, transported, removed, deposited, kept, concealed, sold, purchased, or otherwise dealt with excisable goods knowing or having reason to believe they were liable to confiscation. Where the conduct was limited to issuing fake gate passes and no excisable goods were shown to have been dealt with, the essential precondition for Rule 209A was absent. A later Rule 26(2) addressing similar fraudulent-document conduct was noted, but it could not be applied retrospectively. The penalty was therefore not leviable and was set aside.

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Issues: Whether penalty under Rule 209A of the Central Excise Rules, 1944 was sustainable against persons alleged to have issued fake gate passes without dealing in excisable goods liable to confiscation.

Analysis: Rule 209A applies only where a person acquires, transports, removes, deposits, keeps, conceals, sells, purchases, or otherwise deals with excisable goods knowing or having reason to believe that the goods are liable to confiscation. On the facts found, no excisable goods were supplied or dealt with; the alleged conduct was confined to issuance of fake documents facilitating wrongful credit. In the absence of any goods liable to confiscation, the essential precondition for invoking Rule 209A was not satisfied. The introduction of Rule 26(2) of the Central Excise Rules, 2002 was noted as a later provision covering similar fraudulent-document situations, but it could not be applied retrospectively.

Conclusion: Penalty under Rule 209A was not leviable and was set aside.

Final Conclusion: The appellants were exonerated from the impugned penalties and the appeals succeeded.

Ratio Decidendi: Penalty under Rule 209A cannot be imposed unless the person is shown to have dealt with excisable goods liable to confiscation; mere issuance of fake documents facilitating credit is insufficient in the absence of such goods.

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