Rule 209A penalty cannot be imposed on a furnace supplier absent goods liable to confiscation and a valid statutory basis.

Penalty under Rule 209A of the Central Excise Rules, 1944 was not sustainable against the supplier of a furnace because the rule applies only to persons concerned with excisable goods liable to confiscation. The furnace supplied was capital goods, not the goods alleged to have been cleared in contravention, and no finding showed that the furnace itself was liable to confiscation or that the supplier dealt with goods so liable. The order also rested on an incorrect assumption that the rule could be invoked for duty under Section 3A, although the rule contemplated duty payable under Section 3. On those facts, the penal provision had no established basis.

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Issues: Whether penalty under Rule 209A of the Central Excise Rules, 1944 could be imposed on the supplier of the furnace in the facts of the case.

Analysis: The penalty recorded against the appellant was not specifically quantified in the operative part of the original order. Rule 209A applies to persons concerned with excisable goods liable to confiscation, whereas the furnace supplied by the appellant was capital goods and not the goods alleged to have been cleared in contravention. No finding was recorded that the furnace itself was liable to confiscation or that the appellant dealt with goods so liable. The order also proceeded on a view that the rule could be invoked in relation to duty under Section 3A, though the rule contemplated duty payable under Section 3. On the facts and materials relied upon, the basis for invoking the penal provision was not established.

Conclusion: Penalty under Rule 209A could not be sustained against the appellant.

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