Confiscation and penalty under Customs law require proof of illegal import and requisite knowledge; uncharged grounds cannot sustain an order.

Confiscation under Section 111(d) of the Customs Act requires proof that the goods were imported or attempted to be imported contrary to law; mere seizure from a shop is insufficient, and confiscation was therefore unsustainable. Penalty under Section 112 also requires proof of the person's knowledge of, or connection with, the prohibited import, and the penalty could not stand once that foundation was absent. A revisional order cannot be supported on a ground not forming part of the original charge; the order based on the goods being kept for sale was liable to be quashed. The text states that the confiscation, penalty, and revisional order all failed for want of lawful basis.

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Issues: (i) Whether the seized goods were liable to confiscation under Section 111(d) of the Customs Act, 1962 in the absence of proof that they were imported contrary to law; (ii) Whether penalty under Section 112 of the Customs Act, 1962 could be sustained without proof of knowledge that the goods were liable to confiscation; (iii) Whether the revisional order could stand when it rested on a ground not forming part of the charge.

Issue (i): Whether the seized goods were liable to confiscation under Section 111(d) of the Customs Act, 1962 in the absence of proof that they were imported contrary to law.

Analysis: Confiscation under Section 111(d) requires proof that the goods were imported or attempted to be imported contrary to the Customs Act or any other law in force. Mere seizure of the goods from a shop did not by itself establish illegal importation. The record did not show that the goods had been notified under the relevant control provisions or that they were brought into India in violation of the statutory prohibition. The finding of confiscability therefore lacked factual foundation.

Conclusion: The confiscation was not sustainable and is held to be unlawful.

Issue (ii): Whether penalty under Section 112 of the Customs Act, 1962 could be sustained without proof of knowledge that the goods were liable to confiscation.

Analysis: Penalty under Section 112 depends upon proof that the person concerned had knowledge, or was otherwise connected with the prohibited import, so as to attract liability in relation to goods liable for confiscation. The authorities did not establish such knowledge against the petitioner-firm, and once confiscation itself failed, the foundation for penalty also disappeared.

Conclusion: The penalty order is not sustainable.

Issue (iii): Whether the revisional order could stand when it rested on a ground not forming part of the charge.

Analysis: The revisional authority sustained the adverse order on the basis that the goods were kept in the shop for sale. That basis was not the subject of the original charge, nor was confiscation or penalty imposed on that footing. An order supported on an uncharged ground could not be maintained.

Conclusion: The revisional order is liable to be quashed.

Final Conclusion: The confiscation, penalty, and revisional order all failed for want of lawful basis, and the petitioner succeeded in the writ petition.

Ratio Decidendi: Confiscation under Section 111(d) of the Customs Act, 1962 requires proof of prohibited import, and penalty under Section 112 requires proof of the requisite knowledge or connection with the unlawful import; an adverse order cannot be sustained on a ground not forming part of the charge.

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