Rule 209A penalty requires prima facie proof of dealing with confiscable goods before pre-deposit can be demanded.

Penalty under Rule 209A of the Central Excise Rules was not supported by any prima facie finding that the appellants had acquired, possessed, concealed, transported, sold, purchased, or otherwise dealt with excisable goods known or believed to be liable to confiscation. The only recorded basis was that they had not shown themselves to be bona fide purchasers and had relied on fake purchase documents, which did not by itself satisfy the essential ingredients of Rule 209A. On that footing, a prima facie case was made out for waiver of pre-deposit of the penalty and stay of recovery pending disposal of the appeal.

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Issues: Whether the penalty imposed under Rule 209A of the Central Excise Rules, 1994 called for waiver of pre-deposit and stay of recovery pending disposal of the appeal.

Analysis: The penalty order did not discuss the appellants' role in dealing with or handling the alleged offending goods in a manner attracting Rule 209A. The recorded basis for penalty was that the appellants had failed to establish themselves as bona fide purchasers and had filed a false and invalid claim on the strength of fake purchase documents. That reasoning did not disclose, even prima facie, the essential ingredients for penalty under Rule 209A, namely acquisition, possession, concealment, transport, sale, purchase, or other dealing with excisable goods known or believed to be liable to confiscation.

Conclusion: A prima facie case was made out for waiver of pre-deposit of the penalty and stay of its recovery pending the appeal.

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