Customs penalty under Section 112(a) not sustainable where person only handed documents to the CHA

Penalty under Section 112(a) of the Customs Act, 1962 applies only where a person, in relation to goods, does or omits to do an act rendering the goods liable to confiscation, or abets such act or omission. In an import transaction, statutory responsibilities rest with the importer and the CHA. Mere handing over import documents to the CHA, without any independent statutory duty in the transaction and where the CHA was not found to have committed any wrongful act or omission, does not establish liability for penalty. On that basis, the penalty was held to be unsustainable.

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Issues: Whether penalty under Section 112(a) of the Customs Act, 1962 was sustainable against a person who merely handed over import documents to the CHA and had no statutory obligation in the import transaction.

Analysis: Penalty under Section 112(a) is attracted only when a person, in relation to goods, does or omits to do an act that renders the goods liable to confiscation, or abets such act or omission. In an import transaction, the statutory responsibilities lie with the importer and the CHA. Where the appellant only handed over documents to the CHA, and the CHA itself was not found guilty of any act or omission, no legal basis remained to treat the appellant as responsible for any statutory breach or abetment.

Conclusion: The penalty was not sustainable and the issue was decided in favour of the assessee.

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