#Section 112(b)

CESTAT Allahabad quashed Rs. 8 lakh penalties on gold and silver seizures, ruling that customs authorities cannot impose penalties under Section 112(b) based on uncorroborated suspicion alone. The ruling mandates concrete evidence of foreign origin and actual knowledge of smuggling-setting a vital precedent for travelers and traders facing arbitrary confiscations without proof of intent.

CESTAT rules that penalties under Section 112(b) of the Customs Act cannot be imposed without concrete evidence of the appellant's knowledge or physical possession of illicit goods. The tribunal underscores that mere association with a supplier or failure to prove mens rea invalidates penalty imposition, reinforcing natural justice principles in customs enforcement.

CESTAT Kolkata rules that imposition of penalty under Section 112(b) of the Customs Act requires proof of prior knowledge through circumstantial evidence, not just the appellants' claims of ignorance. The tribunal set aside penalties imposed solely on verbal assertions, emphasizing the need for corroborative evidence in smuggling cases.