Penalty under Section 114A requires liability to duty or interest; absence of such liability defeats the levy.

Penalty under Section 114A is attracted only where the person is liable to pay duty or interest in the circumstances covered by the provision. Where the appellant neither imported nor exported the goods and there was no finding that it was liable to pay duty or interest, the statutory basis for imposing penalty was absent. The penalty was therefore not sustainable and was set aside.

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Issues: Whether penalty under Section 114A could be imposed on the appellant, who was neither liable to pay duty or interest nor the importer of the goods.

Analysis: Section 114A contemplates penalty only on a person who is liable to pay duty or interest in the circumstances covered by that provision. The appellant neither imported nor exported the goods that were the subject matter of the proceedings, and there was no finding establishing that the appellant was the person liable to pay the duty or interest. In these circumstances, the statutory basis for fastening penalty on the appellant was absent.

Conclusion: Penalty under Section 114A was not sustainable against the appellant and the levy was set aside.

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