Rule 209A penalty covers transport-related conduct that enables bogus modvat documents and fraudulent credit claims.

Rule 209A of the Central Excise Rules, 1944 extends penalty beyond actual physical handling of excisable goods to persons concerned in transporting or otherwise dealing with them with reason to believe they are liable to confiscation. Supplying blank G.R. books to a dealer, where that conduct enabled the creation of bogus modvatable documents and fraudulent availment of modvat credit, satisfied the statutory ingredients of the rule. The Tribunal's narrower view was found erroneous, and penalty against the transporters was upheld.

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Issues: Whether a transporter who supplied blank G.R. books and thereby facilitated issuance of fake or bogus modvatable documents could be subjected to penalty under Rule 209A of the Central Excise Rules, 1944.

Analysis: The transporters were found not to have actually transported the goods, but they had supplied blank G.R. books to the dealer, which enabled the creation of bogus modvatable documents and fraudulent availment of modvat credit. Rule 209A covers not only a person who acquires possession of excisable goods, but also one who is concerned in transporting, removing, depositing, keeping, concealing, selling, purchasing, or otherwise dealing with goods, with reason to believe that they are liable to confiscation. On those facts, the statutory ingredients of the rule were satisfied and the Tribunal's contrary view was held to be erroneous.

Conclusion: Penalty under Rule 209A of the Central Excise Rules, 1944 was rightly attracted against the transporters, and the Revenue's appeal was allowed.

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