Customs penalty requires proven nexus with smuggled goods; mere presence of a lawful consignment in the vehicle is insufficient.

Penalty under Section 112 of the Customs Act, 1962 cannot be sustained without cogent evidence showing a direct nexus with, or abetment of, the act rendering goods liable to confiscation. The appellant had booked phool jhadu under invoice and e-way bill, while smuggled foreign-origin cigarettes were found concealed in the same vehicle. However, there was no material to show that he was the transporter, owner, or person in charge of the vehicle, or that he had loaded, handled, or otherwise connected himself with the cigarettes. On that footing, the penalty was held unsustainable and was set aside.

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Issues: Whether the penalty imposed on the appellant under Section 112(a) and Section 112(b) of the Customs Act, 1962 was sustainable when no connection was established between the appellant and the smuggled foreign-origin cigarettes.

Analysis: The appellant had placed an order for phool jhadu supported by invoice and e-way bill, and the goods actually found were only short in quantity compared with the invoice. The foreign-origin cigarettes were found concealed in the same vehicle, but there was no material showing that the appellant was the transporter, owner, or person in charge of the vehicle, or that he had loaded, handled, or otherwise connected himself with the cigarettes. Penalty under Section 112 requires a proved involvement or abetment in the act rendering goods liable to confiscation, and mere presence of the appellant's consignment in the vehicle was insufficient to establish such involvement.

Conclusion: The penalty on the appellant was not sustainable and was set aside.

Ratio Decidendi: Penalty under Section 112 of the Customs Act, 1962 cannot be sustained unless the person proceeded against is shown by cogent evidence to have a direct nexus with, or to have abetted, the act rendering the goods liable to confiscation.

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