Customs broker penalty under export overvaluation allegations fails where knowledge, participation, and confiscation-linked conduct are unproved.

Penalty under section 114(iii) of the Customs Act requires proof that the person did, or omitted to do, an act rendering the goods liable to confiscation under section 113. No material showed that the Customs Broker participated in overvaluation, knew the export goods were overvalued, or withheld any such knowledge from the department. The valuation of export goods is not the Customs Broker's function, and mere non-cooperation during investigation does not by itself satisfy the ingredients for penalty. The penalty was therefore not sustainable and was set aside.

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Issues: Whether penalty under section 114(iii) of the Customs Act, 1962 could be sustained against the Customs Broker for alleged abetment of overvaluation of export goods and for non-cooperation during investigation.

Analysis: Penalty under section 114(iii) is attracted only where the person concerned has done or omitted to do an act which rendered the export goods liable to confiscation under section 113. The record contained no material showing that the Customs Broker participated in overvaluation, knew that the export goods were overvalued, or failed to disclose any such knowledge to the department. The valuation of export goods is not for the Customs Broker to determine, and mere non-cooperation during investigation does not by itself establish the ingredients necessary for penalty under section 114(iii).

Conclusion: The penalty under section 114(iii) was not sustainable and was set aside in favour of the appellant.

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