Transporter penalty under Rule 209A needs proof of knowledge that goods were liable to confiscation

A transporter cannot be penalised under Rule 209A of the Central Excise Rules, 1944 unless the department proves that he knew or had reason to believe the goods were liable to confiscation. Mere acceptance and carriage of goods, without evidence of conscious involvement in illicit transport or knowledge of non-payment of duty, is insufficient. Goods found in the market are treated as presumed duty paid, and the transporter is not required to verify duty payment independently. On these facts, the adverse confiscatory action and penalty could not be sustained, and consequential relief followed.

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Issues: Whether penalty and consequential confiscatory action could be sustained against transporters under Rule 209A of the Central Excise Rules, 1944 in the absence of ation that they knew or had reason to believe that the goods were non-duty paid and liable to confiscation.

Analysis: The appellants were only transporters who had accepted goods for carriage from Delhi to Calcutta. The record did not establish that they had any knowledge of non-payment of duty or any conscious involvement in illicit transport. The provisions relied upon by the department were directed to factory removals and were not shown to fit the facts. The cited decisions supported the principle that goods available in the market are presumed to be duty paid, that no duty-paid verification burden lies on the buyer or transporter, and that the department must first establish a link with the manufacturer before fastening liability for alleged clandestine removal. The fact that provisional release was sought or that some consignor details later appeared fictitious did not by itself prove guilty knowledge or mala fide participation.

Conclusion: Penalty under Rule 209A and the connected adverse order could not be sustained; the appeal was allowed and the appellants were held entitled to consequential relief.

Ratio Decidendi: A transporter cannot be penalised under Rule 209A unless the department proves that he knew or had reason to believe that the goods were liable to confiscation, and mere carriage of goods or later seeking provisional release does not establish such knowledge.

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