Customs penalty waiver at stay stage denied where contraband facts and fictitious shipping details supported prima facie knowledge.

At the stay stage, the tribunal declined complete waiver of a Customs Act penalty because the seized goods were admittedly contraband, absolute confiscation was not disputed, and the consignments carried fictitious consignor and consignee details. On those materials, custody of the goods with the transporters and the surrounding circumstances supported a prima facie presumption of knowledge against the appellants. The argument that transport operators are never required to verify package contents did not displace that presumption. As no financial hardship was shown, only partial relief was granted: a deposit of Rs. 5 lakhs, with the balance penalty waived and recovery stayed pending appeal.

---

---

Issues: Whether complete waiver of the penalty imposed under the Customs Act was warranted at the stay stage, or whether partial pre-deposit should be directed on the basis of the materials then available.

Analysis: The goods were seized from the appellants' premises, their contraband character and absolute confiscation were not disputed, and the consignments were booked with fictitious consignor and consignee details. In these circumstances, the custody of the goods with the transporters and the surrounding circumstances gave rise to a prima facie presumption against the appellants regarding knowledge of the nature of the goods. The contention that transport operators are never required to verify contents of packages did not displace that presumption on the facts found. No financial hardship was shown to justify total waiver of the penalty amount.

Conclusion: Complete waiver of the penalty was declined. The appellants were directed to deposit Rs. 5 lakhs, and on such deposit the balance penalty stood waived and recovery of the balance was stayed pending disposal of the appeal.

---