Customs penalty cannot stand without evidence of conspiracy or participation in the alleged misuse of an import scheme.

Penalty for alleged customs contravention in connection with the import and local sale of duty-free glycerine could not be sustained because the record contained no statements or other material linking the appellants to any conspiracy or misuse of the import scheme. The Commissioner's finding lacked an evidentiary foundation, and breach of the Customs Act, 1962, the Exim Policy, and the relevant Customs Notifications was not established against the appellants. The penalty was therefore set aside and the impugned order was vacated to that extent.

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Issues: Whether the penalty imposed on the appellants for alleged conspiracy and contravention of customs law in connection with import and subsequent local sale of duty-free glycerine could be sustained.

Analysis: The record contained no statements or other material to show any conspiracy or involvement of the appellants in the alleged misuse of the import scheme. The finding of the Commissioner rested on no evidentiary foundation, and the alleged violation of the Customs Act, 1962 and the relevant Exim Policy and Customs Notifications was not established against the appellants.

Conclusion: The penalty could not be sustained and was set aside.

Final Conclusion: The appellants succeeded and the impugned order was vacated to the extent it imposed penalty.

Ratio Decidendi: A penalty for alleged customs violation cannot be upheld in the absence of material evidence establishing the assessee's conspiracy or participation in the contravention.

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