CESTAT ruled that if goods aren't liable for confiscation under Customs Act 1962, penalty can't be imposed under u/s 112.

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....The case involved the scope for retention of penalty u/s 112 of Customs Act, 1962 after liability to confiscation was set aside. Confiscation pertains to goods, while penalty is on persons. Customs Act does not allow separate confiscation for individuals. The show cause notice alleged goods liable for confiscation u/s 111(o). Penalty u/s 112 applies only if a person contributed to the confiscation. Without confiscation, penalty cannot be imposed. Appeal allowed, nothing remains against the two individuals.....