Established personal involvement is essential for customs penalties; defective origin certificate allegations alone cannot sustain liability.

Section 28 proceedings against the importer were dropped because the High Court had already found the underlying show cause notice invalid; the adjudicating authority's action was therefore sustained. Penalty for alleged customs contraventions involving defective certificates of origin could not be imposed where neither the notice nor the adjudication established the individual's role or involvement in obtaining those certificates. The importer remained free from the proposed demand proceedings, and the individual's penal liability was set aside.

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Issues: (i) Whether dropping proceedings against the importer under Section 28 was sustainable; (ii) Whether penalty could be imposed where the notice and order did not establish the individual's role in obtaining defective certificates of origin.

Issue (i): Whether dropping proceedings against the importer under Section 28 was sustainable.

Analysis: The High Court had already determined that a show cause notice under Section 28 was invalid in respect of the importer. The adjudicating authority consequently dropped the proceedings, and no basis existed to disturb that action.

Conclusion: Dropping of the Section 28 proceedings was sustained, in favour of the assessee.

Issue (ii): Whether penalty could be imposed where the notice and order did not establish the individual's role in obtaining defective certificates of origin.

Analysis: Neither the show cause notice nor the impugned order identified or established the individual's role or involvement in obtaining the allegedly defective certificates of origin.

Conclusion: Penalty was not imposable and was set aside, in favour of the assessee.

Final Conclusion: The importer remained free from the proposed demand proceedings, and the individual was relieved of penal liability.

Ratio Decidendi: A penalty for customs contravention cannot be sustained where the notice and adjudication fail to establish the penalised person's role or involvement in the alleged contravention.

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