Penalty for receipt of non-duty-paid goods requires proof of conscious contravention, not mere technical breach.

Penalty under Rule 209A of the Central Excise Rules was considered unsustainable where the recipient of excisable goods had no statutory basis to know that the goods were non-duty paid. The relevant period predated Section 12A, invoices were not required to show duty particulars, and the recipient was not taking Modvat credit because the end product was exempt. In those circumstances, conscious contravention could not be inferred from a mere technical breach. The penalty on the recipient was set aside, and the commentary also notes that the duty quantification was capable of reduction under the prescribed valuation formula.

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Issues: Whether penalty under Rule 209A of the Central Excise Rules, 1944 could be sustained against the recipient of goods, in the facts of the case.

Analysis: The relevant period preceded the introduction of Section 12A of the Central Excise Act, 1944. During that period, invoices were not required to indicate duty particulars, and the recipient was not availing Modvat credit, the end product being exempt. In the absence of such statutory indication, the recipient could not be presumed to have had knowledge that the goods were non-duty paid. Penalty in fiscal law requires a conscious disregard of the law and not a mere technical breach. The earlier reduction of penalty on the manufacturer was also noted, and the duty quantification itself was stated to be capable of reduction by the prescribed valuation formula.

Conclusion: Penalty on the recipient was not sustainable and was set aside.

Final Conclusion: The appeal succeeded and the penalty order was annulled with consequential relief.

Ratio Decidendi: Penalty for receipt of allegedly non-duty-paid excisable goods cannot be imposed absent a statutory basis for knowledge and absent proof of conscious contravention; a mere technical breach does not justify penalty.

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