Penalty under Customs law cannot rest on a bare licensing breach without improper importation or confiscability.

Penalty under Section 112(a) of the Customs Act, 1962 was held unsustainable because the alleged breach was confined to the Customs Brokers Licensing Regulations and no specific act or omission was attributed that made the goods liable to confiscation as improperly imported. The tribunal noted that Section 112(a) operates only where the statutory ingredients of improper importation and confiscability are satisfied; a mere regulatory violation, without a nexus to improper importation, is insufficient. As duty and interest had already been paid, the import could not be treated as improper on the facts, and the penalty was set aside.

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Issues: Whether penalty under Section 112(a) of the Customs Act, 1962 was sustainable against a customs house agent for alleged violation of Regulations 13(d) and 13(e) of the Customs Brokers Licensing Regulations, when no specific act or omission was attributed and the differential duty with interest had already been paid.

Analysis: The allegation against the appellant was confined to breach of the Customs Brokers Licensing Regulations and did not attribute any specific act or omission that resulted in improper importation of goods. Penalty under Section 112(a) is attracted only where the goods are liable to confiscation as improperly imported goods, and the related confiscation regime under Section 111 proceeds on the footing of such improper importation. Once the duty and interest were collected, the import could not be treated as improper on the facts of the case. The provision invoked did not contemplate penal action merely for violation of another regulatory code, in the absence of the statutory ingredients for improper importation and confiscability.

Conclusion: The penalty under Section 112(a) was not sustainable, and the assessee succeeded on this issue.

Final Conclusion: The impugned order imposing penalty was set aside and the appeal was allowed.

Ratio Decidendi: Penalty under Section 112(a) of the Customs Act, 1962 can be imposed only when the act or omission renders the goods liable to confiscation as improperly imported goods, and not for a mere violation of Customs Brokers Licensing Regulations absent a specific nexus with improper importation.

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