The central legal point established in the judgment is that abetment under Section 112(a) of the Customs Act requires knowledge of the offending act, and the penalty for abetment cannot be imposed without establishing the abettor's knowledge.

JUDGMENT

Vibhu Bakhru, J.

INTRODUCTION

1. The appellant has filed the present appeal under Section 130 of the Customs Act, 1962 (hereafter `the Customs Act'), impugning an order dated 04.06.2020 (hereafter `impugned order') passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi (hereafter `the Tribunal') in appeal no. C/51543/2018-CU(DB).

2. The appellant had preferred the said appeal against an order dated 02.01.2018 (hereafter `the order-in-original') passed by the Adjudicating Authority, imposing a penalty of Rs.34,14,020/- on the appellant under Section 112(a) of the Customs Act.

3. The appellant is a G-Card holder of M/s GND Cargo Movers, a person licenced to as a Customs Broker within the meaning of Regulation 2(d) of the Customs Broker Licensing Regulations, 2018 (hereafter `CBLR'). The appellant had filed the Bill of Entry for import of certain goods that were found to be liable for confiscation. The Adjudicating Authority had found that the goods imported were prohibited goods and were illegally imported. The Adjudicating Authority also found that the appellant was "aware of the things which led to irregular filing of the Bill of Entry for the illegal imports made" and by the order-in-original imposed a penalty equivalent to 25% of the maximum penalty leviable under Section 112 of the Customs Act.

4. Aggrieved by the order-in-original, the appellant preferred an appeal before the Tribunal. The Tribunal, after evaluating the facts, found that "no case of connivance is made out against the appellant/employee" and that at best, it appeared that the appellant had "unknowingly abetted or been instrumental in the nefarious activity of the import of the prohibited goods, by the actual importer-Mr. Ramesh Wadhera, and the lender of the IEC Code" The Tribunal also found that the penalty imposed under the order-in-original was high and disproportionate and, accordingly, reduced the quantum of penalty from Rs.34,14,020/- to Rs.10,00,000/-.

QUESTION OF LAW

5. The appellant has projected several questions of law for the consideration of this Court. However, this Court had, on 11.04.2023, framed the following question for consideration in this appeal:

"Whether, in the given facts, penalty under Section 112(a) of the Customs Act can be imposed on the appellant?"

6. We feel that it would be apposite to reframe the question to be addressed as under:

"Whether, given the finding that no case of connivance is made out by the appellant and he had no knowledge of the import of prohibited goods, penalty under Section 112(a) of the Customs Act for abetting their illegal import of prohibited goods, can be imposed on the appellant?"

FACTUAL CONTEXT

7. The officials of the Directorate of Revenue Intelligence (hereafter `the DRI') examined the container (being container no. HLXU 6239078) imported by M/s Pixel Overseas. The said container was found to contain the following goods:

8. The Bill of Entry was filed for 1208 (one thousand two hundred and eight) pieces of two-burner gas stoves (two pieces per carton). The price of the said goods were declared as USD 10.2 per piece. The value of the goods was declared as USD 12321.6 (computed at the rate of USD 10.2 per piece). The said containers were shipped from China to ICD Tughlakabad, New Delhi. The Bill of Entry neither disclosed 1088 (one thousand and eighty eight) cylinders nor the dried herbs, which were subsequently identified as `salaam mishri'.

9. The aforesaid goods were seized. Thereafter, search was conducted at the premises of