Culpable negligence standard bars penalty where export consignments were sealed and endorsed by a statutory quality-control agency.

Penalty on a Customs House Clearing Agent for alleged negligence in handling export consignments was held unsustainable where the cartons were sealed and endorsed by the Central Silk Board and the accompanying certificate showed inspection in the authority's presence. On those facts, the agent could bona fide believe the consignments matched the invoices. The record showed negligence only, with no evidence of mala fides, collusion, or unlawful gain. In the absence of culpable negligence and considering the appellant's clean record, the extreme step of penalty was not justified, and the penalty was set aside.

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Issues: Whether penalty on the Customs House Clearing Agent was sustainable for alleged negligence in accepting and processing export consignments on the strength of documents endorsed by the Central Silk Board.

Analysis: The consignment was found to have been sealed and endorsed by the Central Silk Board, a statutory quality-control agency, and the documents bore a certificate indicating inspection and sealing in the presence of the inspecting authority. In these circumstances, the appellant could bona fide have believed that the cartons contained the goods described in the invoices. The finding recorded against the appellant was of negligence, but there was no evidence of mala fides, collusion, or illegal gain. In the absence of culpable negligence, and having regard to the appellant's long clean record, the extreme consequence of penalty was not justified.

Conclusion: The penalty was not sustainable and was set aside in favour of the appellant.

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