Personal penalty under Central Excise rules cannot be sustained against a partnership firm or its partner on these facts.

Penalty under Rule 209A of the Central Excise Rules, 1944 was held not legally sustainable against a partnership firm, as personal penalty cannot be imposed on a firm as such. Applying the same principle, the Tribunal also found the penalty unsustainable against the partner where the firm itself was not liable on the facts found. As the penalty failed on this threshold issue, the other grounds raised by the appellants were not examined, and the penalties were set aside.

---

---

Issues: Whether penalty under Rule 209A of the Central Excise Rules, 1944 could be sustained against a partnership firm and its partner.

Analysis: The Tribunal held that the controversy could be decided on the limited question whether personal penalty was legally imposable on a partnership firm. It relied on prior decisions holding that penalty under the analogous penalty provision is not imposable on a firm as such, and further noted that the same principle applies to the partner where the firm itself is not liable on the facts found. The Tribunal accepted that the other contentions raised by the appellants need not be examined, as the penalty itself was unsustainable on this ground.

Conclusion: Penalty under Rule 209A was not sustainable against the partnership firm or its partner, and the penalties were set aside in favour of the assessee.

---