Personal penalty on a managing director requires proof of involvement or connivance in import notification breach.

Personal penalty on a company officer for breach of import notification conditions cannot be sustained unless the Department adduces material showing the officer's personal involvement or connivance in the offence. Where the imported goods were not utilised, the factory was not set up, and there was no evidence of sale or diversion of the goods in the market, the requisite nexus was absent. On those facts, the Managing Director's individual penalty was set aside, while the company's liability was left undisturbed.

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Issues: Whether personal penalty could be imposed on the Managing Director for non-fulfilment of the conditions of the import notification, in the absence of material showing his personal involvement or connivance in the offence.

Analysis: The imported goods were not utilised, the factory was not set up, and there was no evidence that the goods were sold in the market or otherwise diverted in breach of the policy. The reasoning adopted in the cited decisions was that penalty on a company officer cannot be sustained unless the Department establishes some material connecting that person with the commission of the offence. On the facts, no such material was brought on record against the Managing Director, although the company's liability was not disturbed.

Conclusion: The personal penalty on the Managing Director was not sustainable and was set aside.

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