Transporter liability under excise law requires material showing knowledge or reason to believe goods were liable to confiscation.

Penal or confiscatory liability under excise law cannot be fastened on a transporter, driver or helper merely because they handled goods on the strength of consignor-supplied documents. The text states that where the parties were not manufacturers and there was no material showing participation in the manufacturing process or culpable involvement in defective duty documents, knowledge or reason to believe that the goods were liable to confiscation could not be inferred. On that basis, the show cause notices and seizure action were described as unsustainable and were quashed, because the requisite basis for invoking penal consequences was absent.

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Issues: Whether transporters, the driver and helper could be proceeded against under excise law on the footing that they knew or had reason to believe that the goods being transported were liable to confiscation, and whether the show cause notices and seizure action were sustainable.

Analysis: The petitioners were not manufacturers and were only connected with transportation and delivery of goods on the strength of documents furnished by the consignor. The material did not show that they had any role in the manufacturing process or in the alleged defect in the duty documents. Liability to assess and account for excise duty rested on the manufacturer, and at most the facts disclosed a possible lapse in preparation of documents by the manufacturer. On those facts, knowledge or reason to believe on the part of the transporter, driver or helper that the goods were liable to confiscation could not be inferred, and the basis for invoking penal consequences was lacking.

Conclusion: The show cause notices and seizure action were unsustainable and were quashed; the challenge succeeded.

Final Conclusion: The proceedings against the petitioners could not be maintained in the absence of material showing culpable knowledge or participation, and the impugned seizure and ancillary enforcement measures were set aside.

Ratio Decidendi: Penal or confiscatory liability under excise law cannot be fastened on a transporter or other non-manufacturing intermediary unless there is material showing knowledge or reason to believe that the goods were liable to confiscation.

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