Section 112 penalty fails against former director where post-transfer removal occurred after control ceased and no clause was specified.

Penalty under Section 112 of the Customs Act, 1962 could not be sustained against a former director where the alleged clandestine removal occurred after he had ceased to control the unit, so personal liability for that later act was not established. The penalty was also legally defective because neither the show cause notice nor the adjudication order identified the specific clause of Section 112 under which liability was proposed and imposed, so the penalty was set aside.

---

---

Issues: Whether penalty under Section 112 of the Customs Act, 1962 could be sustained against the former director when the alleged clandestine removal occurred after he had ceased to be in control of the unit, and when neither the show cause notice nor the adjudication order specified the applicable clause under Section 112.

Analysis: The appellant had sold his equity and the unit was taken over with the necessary approvals and intimations. The alleged clandestine removal of bonded capital goods was found to have occurred much later, after the appellant had ceased to control the affairs of the unit, so he could not be fastened with personal liability for that subsequent act. The order was also held legally defective because the notice and the adjudication order did not specify the precise clause of Section 112 under which penalty was proposed and imposed.

Conclusion: Penalty under Section 112 of the Customs Act, 1962 was not sustainable against the appellant and was set aside.

---