Penalty for alleged aiding and abetting import transaction set aside for lack of material evidence linking the Chartered Accountant firm to wrongdoing.

Penalty on a Chartered Accountant firm for allegedly aiding and abetting an import transaction was found unsustainable because the record showed the consumption certificate was issued after examination of the books of account, production register, purchase bills and sales bills. A mere allegation that a high fee was charged was insufficient, by itself, to establish participation in the disputed import. In the absence of material evidence showing assistance to the importer, the penalty was set aside in favour of the assessee.

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Issues: Whether the penalty imposed on the Chartered Accountant firm for allegedly aiding and abetting the import transaction was sustainable in the absence of material evidence.

Analysis: The record showed that the consumption certificate had been issued after examination of the books of account, production register, purchase bills and sales bills. Apart from an allegation regarding a high fee charged for issuing the certificate, there was no material to establish that the firm had aided and abetted the importer in the disputed transaction.

Conclusion: The penalty was held to be unsustainable and was set aside in favour of the assessee.

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