Penalty on transporter under Customs law requires proof of knowing involvement or awareness that goods were smuggled.

Penalty under Section 112(a) and Section 112(b) of the Customs Act, 1962 cannot be fastened on a transporter unless there is evidence of knowing involvement or corroborative material showing awareness that the goods were of foreign origin or smuggled. The consignments had moved within India, booking details and address particulars were furnished, and no concrete evidence connected the transporter to the alleged contravention. On those facts, the penal action was unsustainable, the impugned order was set aside, and consequential relief followed.

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Issues: Whether penalty under Section 112(a) and Section 112(b) of the Customs Act, 1962 was sustainable against a transporter who was neither the consignor nor the consignee of the seized goods and against whom no evidence showed knowledge that the goods were of foreign origin or smuggled.

Analysis: The Revenue did not adduce evidence showing that the appellant knowingly transported goods with awareness of their foreign origin. The consignment moved within India, the appellant had furnished booking details and address particulars, and there was no concrete or corroborative material establishing knowledge that the cigarettes were smuggled. In the absence of proof connecting the appellant to the alleged contravention, penal consequences under Section 112(a) and Section 112(b) could not be fastened.

Conclusion: The penalty was held unsustainable and the appellant succeeded on the merits of the challenge.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief according to law.

Ratio Decidendi: Penalty under Section 112 of the Customs Act, 1962 cannot be imposed on a transporter absent evidence of knowing involvement or corroborative proof that it was aware of the smuggled nature of the goods.

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