Personal penalty for clandestine removal needs proof of specific knowledge or involvement, not mere company designation.

Personal penalty under Rule 209A of the Central Excise Rules, 1944 requires proof that the person dealt with excisable goods knowing them to be liable to confiscation or was consciously involved in evasion. On the record, no specific role was shown for the director in procurement, clearance, or clandestine removal, and the case rested mainly on his position as overall in-charge and alleged inconsistencies in statements. The alleged commission receipts were not established as sale proceeds of clandestinely removed goods. In the absence of evidence of knowledge, connivance, or direct involvement, mere designation in the company could not justify personal penalty, so the penalty was set aside.

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Issues: Whether personal penalty under Rule 209A of the Central Excise Rules, 1944 was sustainable against the director in the absence of specific evidence of his dealing with the goods or conscious involvement in the alleged clandestine removal.

Analysis: The liability to penalty under Rule 209A requires material showing that the person concerned dealt with excisable goods knowing them to be liable to confiscation or was otherwise consciously involved in the evasion. The record did not disclose any specific role of the appellant in procurement, clearance, or clandestine removal. The department's case rested principally on his position as overall in-charge and on inconsistencies in statements recorded during investigation. The alleged commission receipts were also not shown with certainty to be sale proceeds of clandestinely removed goods, especially when the department itself had proceeded on a separate tax demand regarding commission. In the absence of evidence connecting the appellant with the illegal activity, mere designation in the company could not sustain personal penalty.

Conclusion: The penalty under Rule 209A was not sustainable against the appellant and was set aside.

Ratio Decidendi: Personal penalty under Rule 209A cannot be imposed unless the department proves specific involvement, knowledge, or connivance of the person concerned in the confiscable goods or their clandestine removal.

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