Customs penalty requires proof of conscious involvement; mere readiness to collect goods was insufficient here.

Penalty under Section 112 of the Customs Act, 1962 was held unsustainable where the evidence did not show actual taking of delivery of smuggled goods or conscious involvement with them. The appellant's earlier concern with similar goods, and any mere proposal or readiness to collect goods from the transport company, was insufficient to establish possession, dealing, knowledge, or reason to believe that the goods were smuggled. In the absence of material linking the appellant to the goods in question, the statutory ingredients for penalty were not satisfied, and the penalty was set aside.

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Issues: Whether penalty under Section 112 of the Customs Act, 1962 was sustainable against the appellant for alleged involvement in taking delivery of smuggled goods.

Analysis: The appellant's earlier concern with similar smuggled goods was held insufficient to connect him with the goods in question. Mere proposal or readiness to take delivery from the transport company did not, by itself, establish that he had taken delivery or otherwise dealt with the goods in a manner showing knowledge or reason to believe that they were smuggled. In the absence of material showing actual taking of delivery or conscious involvement with the smuggled goods, the ingredients for penalty were not satisfied.

Conclusion: Penalty under Section 112 was not imposable and the appellant succeeded.

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