Customs penalty under Section 112(a) not attracted where illegality arose only from post-import disposal of lawfully imported goods.

Penalty under Section 112(a) of the Customs Act was found inapplicable where the goods had been lawfully imported and any illegality arose only from their subsequent sale or disposal contrary to law. On that reasoning, mere concern with disposal after import did not attract clause (a), and the penalty order was treated as containing an error apparent on the record. The penalty was set aside.

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Issues: Whether penalty under Section 112(a) of the Customs Act, 1962 could be imposed on the appellant for dealing with the goods after their lawful importation.

Analysis: The penalty had been sustained on the footing that the appellant was concerned with the disposal of the goods. The reasoning adopted in the connected matter showed that the import was not illegal and that the illegality, if any, lay only in the subsequent sale or disposal of the goods contrary to law. On that basis, penalty under clause (a) of Section 112 was not attracted. The defect in the order was treated as an error apparent on the record.

Conclusion: Penalty under Section 112(a) was held to be not imposable on the appellant, and the penalty was set aside.

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