Attribution of employer liability requires express imputation and supporting particulars; regulatory breach alone cannot sustain statutory penalty.

Where a show cause notice alleges only breach of the Customs House Agents Licensing Regulations (Regulation 19) without expressly imputing offences under the Customs Act or supplying particulars linking the employer/CHA to the illegal import, penal liability under Section 112(a)(i) cannot be sustained; regulatory supervisory lapse alone does not establish knowledge, participation, or attribution required for statutory penalty. The result is that a penalty predicated solely on Regulation 19 contraventions, absent clear imputation and supporting material tying the CHA to the Customs Act breach, must be set aside and the appeal allowed in favour of the assessee.

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Issues: Whether penalty under Section 112(a)(i) of the Customs Act, 1962 could be validly imposed on the customs house agent where the show cause notice substantively alleged breach of Regulation 19 of the Customs House Agents Licensing Regulations, 2004 but did not properly set out or support an imputation under Section 112(a)(i).

Analysis: The challenge focuses on whether allegations confined to breach of the licensing regulation can serve as an adequate foundation for penal action under Section 112(a)(i) of the Customs Act without specific imputation and supporting particulars in the show cause notice. Applicable legal framework includes the statutory penalty provision (Section 112(a)(i) of the Customs Act, 1962) and the licensing regime obligations (Regulation 19 and consequences under Regulation 20 of the Customs House Agents Licensing Regulations, 2004). A penalty under Section 112 requires a clear imputation of liability under the Customs Act and tangible material connecting the employer/CHA to the employee/agent's illegal import; mere regulatory breach or supervisory lapse under Regulation 19, absent attribution of knowledge or participation, does not automatically satisfy the requisites for Section 112 penal liability. Authority holding that regulatory contravention alone cannot justify imposition of penal consequences under Section 112 unless the employer's knowledge or participation is attributable is applicable.

Conclusion: Penalty under Section 112(a)(i) of the Customs Act, 1962 could not be sustained where the show cause notice only substantively alleged breach of Regulation 19 of the Customs House Agents Licensing Regulations, 2004 and did not properly impute or establish liability under Section 112(a)(i); the impugned penalty is set aside and the appeal is allowed in favour of the assessee.

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