Customs penalty under section 112(b) fails where knowledge, dealing, and corroborated evidence are not proved.

Penalty under section 112(b) of the Customs Act was unsustainable because the record did not prove that the person was concerned with, possessed, or dealt in goods liable to confiscation, or that the person knew or believed they were so liable. Statements recorded under section 108 were not proved in the manner required by section 138B, and third-party ledger entries and computer print-outs lacked independent corroboration. On that evidence, the legal ingredients for penalty were not established.

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Issues: Whether penalty under section 112(b) of the Customs Act, 1962 was sustainable in the absence of proof that the appellant was concerned with goods liable to confiscation and had knowledge or belief of such liability, and whether reliance on statements and third-party records without the safeguards prescribed by law was permissible.

Analysis: Penalty under section 112(b) requires proof that a person acquired possession of, was concerned with, or dealt in goods liable to confiscation, and that such person knew or believed that the goods were liable to confiscation. The order relied on statements recorded under section 108 of the Customs Act, 1962 and on ledger entries and computer print-outs belonging to a third party. The statements were not proved in the manner required by section 138B of the Customs Act, 1962, and the third-party records were not supported by independent corroboration. The material did not establish that the appellant dealt with the goods or had knowledge that they were liable to confiscation under section 111 of the Customs Act, 1962.

Conclusion: Penalty under section 112(b) of the Customs Act, 1962 could not be sustained against the appellant.

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