Rule 26 penalties on salaried employees require independent culpability, not mere directions from superiors.

Separate penalty under Rule 26 of the Central Excise Rules is not warranted against salaried employees where no independent culpable role is established and they are shown to have acted under superiors' directions. The Tribunal noted that no separate role was attributed to the employees, while penalties had already been imposed on the company and the CEO. Applying earlier decisions, it held that mere employment and alleged assistance in clandestine activity, without independent benefit or personal involvement, does not justify additional penalty on the employees, and the penalties were set aside.

---

---

Issues: Whether penalties imposed on salaried employees under Rule 26 of the Central Excise Rules for alleged aiding and abetting the manufacturer's clandestine activities were sustainable.

Analysis: The appellants were salaried employees of the manufacturer and no separate role was attributed to them by the adjudicating authority. The penalty was already imposed on the company and on the CEO. On the facts, the Tribunal followed earlier decisions holding that when employees act under the directions of their superiors and do not derive any independent benefit, separate penalties under Rule 26 are not justified.

Conclusion: The penalties on the employees were not sustainable and were set aside in favour of the appellants.

Ratio Decidendi: Separate penalty under Rule 26 is not warranted against salaried employees who act under the directions of superiors and against whom no independent culpable role is established, particularly where penalty has already been imposed on the company.

---