Customs penalty under Section 116 is quantified using the tariff duty rate, not a concessional exemption rate.

For quantification of penalty under Section 116 of the Customs Act, 1962, the relevant rate is the tariff rate of duty under Section 12(1), not a concessional or exempted rate available through an exemption notification. The charging provision for customs duty is distinct from assessment and quantification provisions, and Sections 14 and 15 operate only in that assessment context. Section 116 imposes strict liability on the person in charge of the conveyance, so using an importer-specific reduced rate would make penalty computation depend on identity and create anomalous results.

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Issues: Whether, for quantification of penalty under Section 116 of the Customs Act, 1962, the relevant rate of duty is the standard tariff rate under Section 12(1) or the reduced rate available under an exemption notification.

Analysis: The charging provision for customs duty is distinct from the provisions governing assessment and quantification of duty. For the purpose of determining the duty chargeable, reference is to the levy under Section 12(1) of the Customs Act, 1962, and not to the reduced effective rate applicable by way of exemption to a particular importer or sector. Sections 14 and 15 operate in the context of assessment and quantification, while Section 116 imposes strict liability on the person in charge of the conveyance. Accepting the reduced-rate approach would make the penalty dependent on the identity of the importer and produce anomalous results.

Conclusion: The penalty under Section 116 is to be quantified on the basis of the tariff rate of customs duty, not the concessional or exempted rate. The review was allowed and the order reducing penalty was set aside.

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