Penalty for clearance of used tyres without licence fails where knowledge of licensing requirement is not proved.

Penalties for clearance of imported old and used tyres without a licence were found unsustainable where the record did not specifically attribute knowledge to the appellants that a licence was required. Mere association with the import transaction and general omissions by persons involved were held insufficient, because the statements relied upon did not establish conscious participation in any prohibited clearance. In the absence of proof of specific role or awareness of the licensing requirement, the penalty could not be sustained and was set aside.

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Issues: Whether penalties imposed on the appellants for clearance of imported old and used tyres without licence were sustainable in the absence of specific attribution of knowledge that such clearance required a licence.

Analysis: The appellants were proceeded against on the basis of their association with the import transaction, but the order did not assign any specific role to them or establish that they knew the goods could be cleared only under a licence. The statements relied upon did not show conscious participation in any prohibited clearance, and mere general omissions of persons involved in the transaction were held insufficient to justify penalty without proof of knowledge of the licensing requirement.

Conclusion: The penalty imposed on the appellants was not sustainable and was set aside.

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