Rule 209A penalty requires independent proof of personal involvement in evasion before liability can be sustained.

Penalty under Rule 209A cannot be sustained against a Managing Director unless there is independent evidence of his knowing involvement in evasion or clandestine clearance of excisable goods. A penalty based only on the company's alleged clearances is insufficient where personal liability has not been separately established. The adjudicating authority must also consider material relevant to non-involvement, including documents showing transfer or lease of the unit and any connected criminal acquittal, before affirming such penalty. The order therefore set aside the penalty and remanded the matter for de novo consideration after hearing the appellant.

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Issues: Whether penalty under Rule 209A could be sustained against the Managing Director without independent proof of his involvement in evasion of duty and whether the matter required reconsideration in light of the appellant's acquittal in criminal proceedings and the documentary plea that the company had been taken over by another concern.

Analysis: The appeal against the company's demand had already been dismissed on a procedural ground and was not treated as requiring fresh adjudication in this order. For the Managing Director, penalty under Rule 209A could not be affirmed merely on the basis of the company's alleged clandestine clearances. Personal liability under that rule had to rest on evidence establishing the person's participation or involvement in the evasion. The appellant produced materials showing transfer or lease of the unit to another concern and also relied on an acquittal by the Special Court in connected criminal proceedings. Those documents had not been considered by the Commissioner, and the order did not reflect an independent examination of the appellant's plea on non-involvement.

Conclusion: The penalty on the Managing Director was set aside and the matter was remanded to the Commissioner for de novo consideration after granting an opportunity of hearing.

Ratio Decidendi: Penalty under Rule 209A requires independent proof that the person proceeded against was knowingly involved in the evasion or clandestine clearance of excisable goods, and the adjudicating authority must consider material bearing on non-involvement before sustaining such penalty.

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