Knowingly aiding duty evasion can attract penalty; Madras HC upheld liability where the person was involved in the undervaluation scheme.

Penalty for abetment in evasion-related offences is sustainable where the person is knowingly concerned in, or intentionally aids, the offending act; mere innocent facilitation without knowledge does not attract liability. The Madras HC upheld penalty against the husband of a partner after finding that he was associated with the business, knew of the excess payments and suppression of value, and participated in the clandestine clearance and undervaluation transaction that facilitated duty evasion. The challenge before the Tribunal was confined to the quantum of penalty, and the court treated the core liability issue as answered against the appellant. The penalty order as modified by the Tribunal was confirmed.

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Issues: Whether penalty imposed on the husband of a partner, as an alleged abettor in the clandestine clearance and undervaluation transaction, was sustainable.

Analysis: The adjudicating authority and the appellate authorities had found that the appellant was associated with the business, had knowledge of the excess payments and suppression of value, and had participated in the transaction that facilitated evasion of duty by the manufacturer. The Court held that the challenge before the Tribunal was confined to the quantum of penalty, and that the core question of liability for penalty on an abettor was answered by the governing principle that penalty can be sustained where the person is knowingly concerned in the offending act. On the facts found, the appellant's role was not treated as a case of mere innocent facilitation.

Conclusion: The penalty on the appellant was upheld and the question was answered against him and in favour of the Revenue.

Final Conclusion: The appeal failed, and the penalty order as modified by the Tribunal stood confirmed.

Ratio Decidendi: Penalty for abetment in evasion-related offences is sustainable where the person is knowingly concerned in, or intentionally aids, the offending act; mere innocent facilitation without knowledge does not attract liability.

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