Knowledge of contraband character is required for customs penalty and confiscation; mere carriage of goods is insufficient.

Penalty and confiscation under the Customs Act could not be sustained merely because the driver-cum-owner knew goods were loaded in his truck; the authorities had to establish knowledge that the goods were smuggled or otherwise of contraband character. As the foreign-origin ball bearings were treated as an OGL item and non-notified under Section 123, mere carriage of the goods did not prove the requisite mens rea. The personal penalty was set aside, and the truck was also held not liable to confiscation under Section 115(2) for want of able knowledge of taint.

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Issues: (i) Whether personal penalty could be sustained against the driver-cum-owner of the truck carrying foreign-origin ball bearings when there was no evidence that he knew of their contraband character. (ii) Whether the truck was liable to confiscation when the driver-cum-owner lacked knowledge that the goods were smuggled or otherwise tainted.

Issue (i): Whether personal penalty could be sustained against the driver-cum-owner of the truck carrying foreign-origin ball bearings when there was no evidence that he knew of their contraband character.

Analysis: The ball bearings were treated as an OGL item and were non-notified under Section 123 of the Customs Act, 1962. Mere knowledge that goods were loaded in the truck was not enough to establish awareness that they were smuggled or otherwise of tainted character. The finding that the appellant would receive excess fare was unsupported by evidence.

Conclusion: The personal penalty was not sustainable and was set aside in favour of the appellant.

Issue (ii): Whether the truck was liable to confiscation when the driver-cum-owner lacked knowledge that the goods were smuggled or otherwise tainted.

Analysis: Confiscation under Section 115(2) of the Customs Act, 1962 required a basis to attribute knowledge of the contraband character of the goods to the person concerned. On the facts found, the driver-cum-owner had no such knowledge, so the conveyance could not be treated as liable to confiscation.

Conclusion: The confiscation of the truck was not sustainable and was set aside in favour of the appellant.

Final Conclusion: The appeal succeeded, with both the penalty and confiscation annulled and the appellant granted consequential relief.

Ratio Decidendi: Penalty and confiscation under the Customs Act cannot be sustained merely because a driver knew goods were loaded in his vehicle; the authorities must establish knowledge of the goods' contraband or smuggled character.

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