Penalty under Central Excise Rules fails where only gate passes were handled and no specific rule breach was proved.

Penalty under Rule 209A of the Central Excise Rules, 1944 could not be sustained where the allegation was confined to handling gate passes and not actual or constructive dealing with excisable goods liable to confiscation; dealing with documents was not enough, so the penalty failed on that ground. Rule 210, being a residuary penal provision, also could not be invoked without a specific pleaded and established breach of a particular rule, and the notice did not identify any such violation; the penalty therefore failed under that provision as well. The appeal succeeded and the penalty order was unsustainable under either rule.

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Issues: (i) Whether penalty could be sustained under Rule 209A of the Central Excise Rules, 1944 when the appellant was alleged only to have dealt with gate passes and not with excisable goods; (ii) Whether Rule 210 of the Central Excise Rules, 1944 could be invoked in the absence of any specific allegation of breach of a particular rule.

Issue (i): Whether penalty could be sustained under Rule 209A of the Central Excise Rules, 1944 when the appellant was alleged only to have dealt with gate passes and not with excisable goods.

Analysis: Rule 209A applies only where a person acquires, transports, removes, deposits, keeps, conceals, sells, purchases, or otherwise deals with excisable goods, with knowledge or reason to believe that such goods are liable to confiscation. The allegation here was confined to passing on gate passes. Dealing with documents could not be equated with physical dealing in excisable goods, and there was no allegation that the appellant had handled excisable goods in the manner contemplated by the rule.

Conclusion: Penalty under Rule 209A was not sustainable against the appellant.

Issue (ii): Whether Rule 210 of the Central Excise Rules, 1944 could be invoked in the absence of any specific allegation of breach of a particular rule.

Analysis: Rule 210 is a residuary penal provision and can be used only when a breach of the Central Excise Rules is established and no specific penalty is otherwise provided. The notice and the findings did not identify any specific rule said to have been violated by the appellant; the allegation was only that he had abetted use of fake gate passes. In the absence of a clearly pleaded and established breach of a specific rule, invocation of the residuary provision was not justified.

Conclusion: Rule 210 was also not validly invokable against the appellant.

Final Conclusion: The penalty order could not be sustained under either of the invoked provisions, and the appeal succeeded.

Ratio Decidendi: A penalty under Rule 209A requires actual or constructive dealing with excisable goods liable to confiscation, and a residuary penalty provision cannot be invoked unless a specific rule breach is shown and no specific penalty provision applies.

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