Abetment under Customs law requires proof of knowledge; CHA KYC lapse alone could not sustain penalty for prohibited export.

Penalty under Section 114 of the Customs Act, 1962 could not be sustained against a CHA firm where the alleged abetment of attempted export of prohibited goods rested only on non-compliance with KYC obligations under the CHALR, 2004. Abetment requires knowing assistance or encouragement in the illegal act, and the record contained no admission, statement, or other evidence showing that the firm knew the consignment concealed red sanders. A regulatory lapse under CHA obligations, without proof of knowledge, was insufficient to establish abetment or justify penalty.

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Issues: Whether penalty under Section 114 of the Customs Act, 1962 could be sustained against a CHA firm for alleged abetment of attempted export of prohibited goods merely on the basis of non-compliance with KYC obligations under the CHALR, 2004, in the absence of proof of knowledge.

Analysis: The allegations against the appellant were founded on failure to obtain and verify KYC details and on non-observance of the obligations under Regulation 11 of the CHALR, 2004. The finding of abetment was therefore built only on the asserted regulatory lapse. Abetment, however, requires some element of knowing assistance or encouragement in the illegal act. On the record, there was no admission by the appellant and no statement or other evidence from co-noticees or witnesses showing that the appellant knew that the consignment concealed red sanders. In the absence of such knowledge, a penalty for abetment could not be sustained merely because of a violation of CHA-related obligations.

Conclusion: Penalty under Section 114 of the Customs Act, 1962 was not sustainable and the appellant succeeded.

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