Penalty under Rule 209A set aside for vague evidence and failure to allow witness cross-examination under Section 9D.

Penalty under Rule 209A of the Central Excise Rules, 1944 was held unsustainable where the evidentiary foundation was vague and unsubstantiated. The Tribunal also noted that the adjudication was vitiated by non-compliance with Section 9D of the Central Excise Act, 1944, because witnesses were not produced for examination and cross-examination. Applying the same reasoning as in the connected matter, the Tribunal concluded that the basis for imposing penalty on the appellant could not survive and set aside the penalty.

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Issues: Whether the penalty imposed under Rule 209A of the Central Excise Rules, 1944 was sustainable.

Analysis: The Tribunal followed its earlier findings in the connected matter and held that the foundation of the case was not sustainable. The materials relied upon were found to be vague and unsubstantiated, and the adjudication was also vitiated by failure to follow the requirement of producing witnesses for examination and cross-examination under Section 9D of the Central Excise Act, 1944. On the same reasoning, the basis for imposing penalty on the present appellant could not survive.

Conclusion: The penalty under Rule 209A of the Central Excise Rules, 1944 was set aside.

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