While quashing the penalty amount against customs broker, the division bench of the Delhi High Court held that the knowledge is an important element for committing abettment.

The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that knowledge of a wrongful act of omission or commission, which rendered the goods liable for confiscation under Section 111 of the Customs Act, is a necessary element for the offence of abetting the act.

Case Brief-

In the said matter, an appelant filed an appeal challenging the Court order passed by the Adjudicating Authority imposing a penalty of Rs. 34,14,020 on him under Section 112(a) of the Customs Act.

The appellant is a G-Card holder of M/s GND Cargo Movers, a person licensed as a Customs Broker within the meaning of Regulation 2(d) of the Customs Broker Licensing Regulations, 2018 (CBLR). The appellant had filed the Bill of Entry for the 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.

After an appealed is filed in the Court, the Court observed that "no case of connivance is made out against the appellant or employee".

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 and the lender of the IEC Code".

The Tribunal also found that the penalty imposed under the order was high and disproportionate and reduced the quantum of the penalty from Rs. 34,14,020 to Rs. 10,00,000.

The issue raised was 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, a penalty under Section 112(a) of the Customs Act for abetting their illegal import of prohibited goods can be imposed on the appellant.

The counsel on the other side argued that the penalty imposed under Section 112(a) of the Customs Act was civil in nature. Therefore, there is no necessity for imputing any knowledge of the acts that rendered the goods liable for confiscation.

Further, it was mentioned before the Court that appellant's filing of the Bill of Entry for the import of goods, which were found to be prohibited,.

While quashing the matter, the court held that persons who have committed acts of omission or commission in relation to goods that rendered them liable for confiscation are liable to pay the penalty as stipulated under Section 112(a) of the Customs Act without any requirement to establish their mal intent.

However, the same principle would not apply to persons who are alleged to have abetted such acts of omission or commission. This is because abetment necessarily requires, at the minimum, knowledge of the offending Act.