Abandonment of imported goods and relinquishment of title can bar customs duty and penalty under Section 112.

Where imported goods are abandoned and the importer wholly relinquishes title under Section 23(2) of the Customs Act, duty is not leviable on those goods, and a penalty under Section 112 cannot be sustained on that basis. The CESTAT, Bangalore held that abandonment and relinquishment of title brought the goods within Section 23(2), with the result that the impugned penalty was set aside.

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Issues: Whether penalty under Section 112 of the Customs Act was leviable when the imported goods were abandoned and title to the goods was relinquished under Section 23(2) of the Customs Act.

Analysis: Section 23(2) contemplates abandonment of goods, and where the importer abandons the goods and totally relinquishes title, duty is not leviable. On that basis, penalty under Section 112 cannot be sustained in such a situation.

Conclusion: Penalty was held to be not leviable and the impugned penalty was set aside.

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