Knowledge requirement for Rule 209A penalty was not proved, so the confiscation-linked penalty was set aside.

Penalty under Rule 209A of the Central Excise Rules, 1944 requires positive evidence that the person proceeded against knew the goods were liable to confiscation. Such knowledge cannot be presumed merely from the appellant's position or designation, and the record did not show involvement in clandestine removal or awareness of removal without duty payment. The penalty was therefore unsustainable and was set aside, with consequential relief as admissible.

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Issues: Whether penalty under Rule 209A of the Central Excise Rules, 1944 could be sustained in the absence of positive evidence that the appellant knew the goods were liable to confiscation.

Analysis: Penalty under Rule 209A requires knowledge on the part of the person proceeded against that the goods were liable to confiscation. Such knowledge cannot be presumed merely from the appellant's position or designation. The record did not contain positive evidence showing that the appellant was involved in clandestine removal or had knowledge that the goods were being removed without payment of duty.

Conclusion: The penalty was not warranted and was unsustainable against the appellant.

Final Conclusion: The appellate relief was granted by setting aside the penalty order, with consequential relief as admissible.

Ratio Decidendi: Penalty under Rule 209A of the Central Excise Rules, 1944 can be imposed only on proof of the person's knowledge that the goods are liable to confiscation, and such knowledge must be established by positive evidence rather than inferred from status or designation alone.

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