2025 (9) TMI 1768 - AT - Customs

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 ... Validity of penalty under Section 112(a) and Section 112(b) of the Customs Act, 1962 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 - Knowledge and conscious involvement for customs penalty - suspicious movement of purportedly smuggled goods. Penalty on carrier for transport of smuggled goods - HELD THAT:- The Tribunal found that the Revenue had not produced any evidence showing that the appellant knowingly transported the goods with awareness of their foreign origin or of their being smuggled. The consignment had been booked from Imphal to Kolkata, both being places within India, and the appellant was only the mover of goods and not the actual consignor or consignee. It had also made available to the Department the details of the person who booked the consignment. In the absence of concrete or corroborative material establishing knowledge or conscious involvement in the alleged contravention, the penal provisions invoked against the appellant were held inapplicable. [Paras 10, 11] The penalty imposed on the appellant was set aside. Final Conclusion: The Tribunal held that no basis existed to impose penalty on the appellant, since its role was confined to transportation and the Revenue failed to establish knowledge or involvement in the smuggled nature of the goods. The appeal was accordingly allowed with consequential relief as per law. 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.