Penalty for clandestine removal requires separate proof of abetment, while documentary evidence can sustain firm liability.

Penalty under Rule 209A of the Central Excise Rules, 1944 requires separate evidence of conscious participation, knowledge, or abetment before personal liability can be imposed on an individual; in the absence of an independent evidentiary basis beyond the firm's case, the penalty on Shri Ajay Shah was set aside. For M/s Royal Synthetics, unchallenged documentary material and surrounding evidence showing knowing assistance in clandestine removal were sufficient to sustain the penalty, and the objection regarding recorded statements did not displace that record. The result was deletion of the individual penalty while the firm's penalty was confirmed.

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Issues: (i) Whether the penalty imposed on Shri Ajay Shah under Rule 209A of the Central Excise Rules, 1944 was sustainable in the absence of separate evidence establishing his individual culpability for abetment of clandestine removal. (ii) Whether the penalty imposed on M/s Royal Synthetics under Rule 209A of the Central Excise Rules, 1944 was sustainable on the basis of the documentary record and the findings of active participation in the evasion.

Issue (i): Whether the penalty imposed on Shri Ajay Shah under Rule 209A of the Central Excise Rules, 1944 was sustainable in the absence of separate evidence establishing his individual culpability for abetment of clandestine removal.

Analysis: The penalty on an individual under Rule 209A requires material showing conscious participation, knowledge, or abetment in the evasion, and not merely association with the transaction. The record against Shri Ajay Shah was found not to rest on a distinct evidentiary foundation separate from the case made out against the firm. In the absence of a separate and legally sufficient basis for fastening personal liability, the penalty could not be sustained.

Conclusion: The penalty on Shri Ajay Shah was set aside.

Issue (ii): Whether the penalty imposed on M/s Royal Synthetics under Rule 209A of the Central Excise Rules, 1944 was sustainable on the basis of the documentary record and the findings of active participation in the evasion.

Analysis: The Tribunal accepted that the clandestine removal stood established by the unchallenged documentary material and that the materials showed knowing assistance by M/s Royal Synthetics in handling the goods cleared without duty. The objection based on the recording of statements did not dislodge the independent force of the parallel documents and the surrounding evidence. On that footing, the firm's liability for penalty was made out.

Conclusion: The penalty on M/s Royal Synthetics was confirmed.

Final Conclusion: The penalty was deleted only in relation to the individual appellant, while the firm's penalty was sustained, resulting in a partial success for the appellants.

Ratio Decidendi: Penalty for abetment in clandestine removal requires separate evidence of conscious participation against the individual sought to be penalised, whereas unchallenged documentary evidence may independently sustain penalty against a firm shown to have knowingly aided the evasion.

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