Prima facie deliberate involvement is required before penalty for contravention can be sustained against a dealer.

A penalty under Rule 209A of the Central Excise Rules, 1944 cannot be sustained at the prima facie stage unless there is material showing deliberate involvement in the contravention relating to the goods. Where the dealer sold fertilisers through an authorised channel and the exemption notification did not restrict the mode of sale, mere sale did not by itself establish breach of the notification or attract penalty. On the record, no prima facie evidence showed that the dealer was privy to any offence, so waiver of pre-deposit and stay of recovery were granted pending appeal.

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Issues: Whether, in proceedings for waiver of pre-deposit and stay, a penalty under Rule 209A of the Central Excise Rules, 1944 could prima facie be sustained against a dealer in fertilisers on the basis that he was privy to the contravention of an exemption notification governing end-use of the goods.

Analysis: The record disclosed no prima facie evidence that the dealer was privy to any offence in relation to the goods. The goods had been sold through an authorised dealer, and nothing in the notification indicated any restriction on the modality of sale by the dealer. For penalty to arise, it had to be established that the appellant was deliberately concerned in the contravention in respect of the offending goods. On the material before the Tribunal, the act of sale by the appellant did not, by itself, show a violation of the notification or attract Rule 209A.

Conclusion: The Tribunal held that no prima facie case for penalty was made out and therefore granted waiver of pre-deposit and stay of recovery pending appeal.

Final Conclusion: Interim relief was granted because the alleged breach of the exemption condition and the appellant's deliberate involvement in the contravention were not shown at the prima facie stage.

Ratio Decidendi: A penalty under Rule 209A of the Central Excise Rules, 1944 cannot be sustained unless there is prima facie material showing deliberate involvement in the contravention of the goods in question.

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