Rule 209A penalty requires findings on confiscable goods and knowledge; waiver of pre-deposit was granted.

Rule 209A of the Central Excise Rules, 1944 can be invoked only where the person concerned dealt with excisable goods knowing, or having reason to believe, that they were liable to confiscation. The adjudication order here did not record prima facie findings that the goods were excisable and liable to confiscation, or that the alleged purchaser had the required knowledge or reason to believe. In the absence of those foundational findings, the ingredients of Rule 209A were not shown at the stay stage, and waiver of pre-deposit with stay of recovery of the penalty was granted pending appeal.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery of penalty under Rule 209A of the Central Excise Rules, 1944.

Analysis: Rule 209A applies only where a person acquires, purchases, transports, removes, deposits, keeps, or is otherwise concerned with excisable goods knowing or having reason to believe that the goods are liable to confiscation under the Act or the Rules. The adjudication order did not record a clear finding that the goods were excisable and liable to confiscation, nor did it record a finding that the alleged purchaser knew or had reason to believe that the goods were so liable. In the absence of these foundational findings, the ingredients of Rule 209A were not shown to be satisfied at the prima facie stage.

Conclusion: The appellant was held entitled to waiver of pre-payment of the penalty and stay of recovery during the pendency of the appeal.

Ratio Decidendi: Penalty under Rule 209A of the Central Excise Rules, 1944 cannot be sustained prima facie unless there is a finding that the goods were liable to confiscation and that the person concerned knew or had reason to believe that fact.

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