Knowingly abetting fraudulent export drawback claims attracts customs penalty, but the quantum may be reduced on facts.

Knowingly lending one's name to a firm, facilitating bank accounts, and participating in fraudulent export drawback claims attracts penalty for abetment under the Customs Act. The Tribunal relied on the appellant's un-retracted voluntary statement and surrounding circumstances to find knowledge and participation, rejecting the plea that she was merely an employee acting under compulsion. However, the appellant's role and financial condition were relevant to quantum, so the penalty was sustained in principle but reduced on the facts from Rs. 10 lakhs to Rs. 2 lakhs.

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Issues: Whether the penalty imposed under Section 114 of the Customs Act, 1962 for knowingly abetting fraudulent export drawback claims was sustainable, and if so, whether the quantum required reduction.

Analysis: The appellant's un-retracted voluntary statement and the surrounding circumstances established knowledge and participation in the export fraud involving inflated drawback claims. The finding that she lent her name to the firm, facilitated the opening and operation of bank accounts, and was aware of the illegal export activity negatived the plea that she was only an employee acting under compulsion. The Tribunal held that an employee who knowingly follows directions and abets the offence cannot claim immunity from penal consequences. At the same time, the facts and the appellant's financial condition were relevant to the extent of penalty.

Conclusion: The penalty was upheld in principle, but it was reduced from Rs. 10 lakhs to Rs. 2 lakhs.

Final Conclusion: The appeal succeeded only to the limited extent of reduction in penalty, while the finding of liability under the penal provision remained undisturbed.

Ratio Decidendi: A person who knowingly lends her name and otherwise facilitates fraudulent export drawback activity is liable to penalty for abetment, though the quantum of penalty may be moderated on the facts of the case.

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