Customs penalty under Section 114 fails without proof of knowledge or intention in the improper export

Penalty under Section 114 of the Customs Act requires evidence linking the respondent to knowledge or intention regarding the improper export. The Tribunal's factual finding that the record did not show awareness of the export of red sanders disguised as natural slate stone was accepted, and the High Court found no basis on the materials to attract the penalty. A possible lapse by the customs house agent, standing alone, was insufficient to sustain customs penalty against the respondent without the requisite evidentiary foundation. The deletion of the penalty was therefore upheld in favour of the assessee.

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Issues: Whether the penalty imposed under Section 114 of the Customs Act was liable to be sustained in the absence of evidence showing knowledge or intention on the part of the respondent in relation to the improper export.

Analysis: The Tribunal found that the record did not establish that the respondent had knowledge of the export of red sanders in the guise of natural slate stone. The High Court accepted that finding as one of fact and noted that, on the materials, there was no basis to attract Section 114 of the Customs Act. The Court also observed that any lapse in the role of the customs house agent, if at all, would not by itself justify the customs penalty on the respondent in the absence of the requisite evidentiary foundation.

Conclusion: The penalty under Section 114 of the Customs Act was not justified and the finding deleting the penalty was upheld in favour of the assessee.

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