Penal liability under Central Excise notice requires factual link to offending goods and knowledge before proceedings can continue.

A show cause notice under Rule 209A of the Central Excise Rules cannot be sustained against company officers unless it contains a factual basis showing their concern with the offending goods and the requisite knowledge or reason to believe that duty had not been paid or the goods were liable to confiscation. Where the notice merely alleges contravention without linking particular officers to the alleged evasion or factory operations, and no averment connects them with the impugned goods, penal proceedings cannot validly continue against them. The notice was quashed insofar as it related to the petitioners, and further action against them was restrained.

---

---

Issues: Whether a show cause notice issued under Rule 209A of the Central Excise Rules could be sustained against company officers who were not shown to be concerned with the alleged evasion of duty or to have knowledge of the goods being liable to confiscation.

Analysis: The notice alleged contravention of Rule 209A on the footing that the petitioners had concerned themselves with goods liable to confiscation and knew, or had reason to believe, that duty had not been paid. The petition, however, specifically asserted that the petitioners were not connected with the factory operations, that some were only directors or senior officers in the Bombay office, and that no averment in the notice linked one petitioner with the alleged evasion. In the absence of any factual foundation connecting the petitioners with the impugned goods or the alleged duty evasion, the notice could not validly proceed against them.

Conclusion: The show cause notice was quashed insofar as it related to the petitioners, and the respondents were restrained from proceeding further against them.

Ratio Decidendi: A show cause notice invoking penal liability cannot be sustained against persons unless it contains a factual basis showing their concern with the offending goods and the requisite knowledge or reason to believe.

---