Customs penalty under Section 112(a) is capped by a maximum limit, with no mandatory minimum of five thousand rupees.

Section 112(a) of the Customs Act was construed as prescribing only an upper limit for penalty, not a mandatory minimum of five thousand rupees. The phrase "not exceeding ... or five thousand rupees whichever is greater" was read as fixing the statutory ceiling, so a penalty could be imposed at any amount within that limit. The departmental contention that the penalty had to be enhanced to five thousand rupees was unsupported by the wording of the provision, and the departmental appeal failed.

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Issues: Whether penalty under Section 112(a) of the Customs Act is required to be imposed at a minimum of five thousand rupees, or whether the provision merely prescribes an upper limit.

Analysis: The expression "not exceeding ... or five thousand rupees whichever is greater" was construed as fixing the maximum penalty that may be imposed, not a mandatory minimum. The wording does not create any floor of five thousand rupees. On the facts, the department's contention that the penalty had to be enhanced to five thousand rupees was found to be unsupported by the language of the provision.

Conclusion: Section 112(a) does not prescribe a minimum penalty of five thousand rupees; the penalty may be imposed at any amount up to the statutory ceiling. The departmental appeal failed.

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