Knowledge of concealment is essential before penalty for courier handling of parcels with hidden Indian currency can be imposed.

Penalty under Section 114 of the Customs Act was held unsustainable against courier employees because there was no finding that they knew the parcels contained concealed Indian currency or that they were aware of any attempt to smuggle it out. The concealment was not detected when the parcels were accepted, and the parcels had been weighed in the ordinary course, so the necessary knowledge-based foundation for penalty was absent. On those facts, the penalty was not warranted and the impugned order was set aside.

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Issues: Whether penalty under Section 114 of the Customs Act, 1962 was sustainable against the courier employees for alleged failure to follow the prescribed procedure in accepting parcels containing concealed Indian currency.

Analysis: The parcels were found to contain concealed currency, but there was no finding that the appellants had knowledge of the concealment or that they were aware of any attempt to smuggle out Indian currency. In the absence of such knowledge, and given the facts that the parcels had been weighed and the concealment was not detected at the time of acceptance, the foundation for imposing penalty was not made out.

Conclusion: The penalty was not warranted and the impugned order was set aside.

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