Section 112(b) penalty requires admissible, corroborated proof of conscious dealing with confiscable goods and requisite knowledge.

Penalty under section 112(b) of the Customs Act, 1962 requires proof that the person was concerned with or dealt with goods liable to confiscation and had knowledge or belief of their confiscable character. A section 108 statement could not be relied on because the procedure under section 138B was not followed, and third-party computer printouts and private records seized from another premises were unsupported by independent corroboration. On that evidentiary basis, the statutory ingredients of section 112(b) were not established, and the penalty was set aside.

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Issues: Whether penalty under section 112(b) of the Customs Act, 1962 was sustainable on the basis of the appellant's section 108 statement and third-party computer printouts and private records, and whether the statutory ingredients of section 112(b) were established.

Analysis: The statement recorded under section 108 was relied upon in the impugned order, but it could not be treated as relevant because the procedure contemplated under section 138B was not followed. The computer printouts were seized from the factory premises of the main noticee and not from the appellant, and the private ledger and printouts were third-party records unsupported by independent corroboration. For penalty under section 112(b), it had to be shown that the appellant was concerned with or dealt with goods liable to confiscation and that he had knowledge or belief of their confiscable character. The record did not establish either conscious dealing with the goods or the requisite knowledge or belief under section 111.

Conclusion: The penalty under section 112(b) could not be sustained and was set aside.

Final Conclusion: The appellant was held not liable to penalty on the basis of uncorroborated third-party material and an inadmissible statement, and the impugned penalty order was quashed.

Ratio Decidendi: Penalty under section 112(b) of the Customs Act, 1962 cannot be imposed unless conscious dealing with confiscable goods and the requisite knowledge or belief are proved by admissible and corroborated evidence.

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