Rule 209A penalty sustained for receipt of duty-cleared branded goods, but the quantum was reduced as excessive.

Liability under Rule 209A of the Central Excise Rules arose where branded goods cleared without payment of duty were received by a proprietary concern. Settlement by the manufacturer and its director under the KVS Scheme did not absolve the concern of its independent liability, and the cited Tribunal rulings were treated as factually distinguishable. The penalty was therefore sustained, but the Tribunal found the original quantum excessive and reduced it to Rs. 50,000.

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Issues: Whether the penalty imposed under Rule 209A of the Central Excise Rules was sustainable, and whether the quantum of penalty required reduction.

Analysis: The appellant had received branded goods cleared without payment of duty, attracting Rule 209A. Settlement by the manufacturer and by the director of the manufacturing unit under the KVS Scheme did not exonerate the proprietary concern from its independent liability. The cited Tribunal decisions were found distinguishable on their facts. However, considering the totality of the facts and circumstances, the penalty was considered excessive.

Conclusion: The penalty under Rule 209A was upheld, but its amount was reduced to Rs. 50,000/-.

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