Penalty for improper importation of goods, etc
Section 112 of the Customs Act, 1962 deals with penalty for improper importation of goods, etc. Any person,-- (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or (b) who acquires possession of or is in any way concerned in carrying, removing, depo The Act came into force on 01 Feb 1963.
Any person,--
(a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or
(b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111,
shall be liable,--
(i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty 1[not exceeding the value of the goods or five thousand rupees], whichever is the greater;
2[(ii) in the case of dutiable goods, other than prohibited goods, subject to the provisions of section 114A, to a penalty not exceeding ten per cent. of the duty sought to be evaded or five thousand rupees, whichever is higher:
Provided that where such duty as determined under sub-section (8) of section 28 and the interest payable thereon under section 28AA is paid within thirty days from the date of communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent. of the penalty so determined;]
3[(iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value thereof, to a penalty 4[not exceeding the difference between the declared value and the value thereof or five thousand rupees], whichever is the greater;
(iv) in the case of goods falling both under clauses (i) and (iii), to a penalty 5[not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees], whichever is the highest;
(v) in the case of goods falling both under clauses (ii) and (iii), to a penalty 6[not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees], whichever is the highest.]
Section 112, The Customs Act, 1962 (Act 52 of 1962).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
- s. 28 Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded
- s. 28AA Interest on delayed payment of duty
- s. 77 Declaration by owner of baggage
- s. 111 Confiscation of improperly imported goods, etc
- s. 114A Penalty for short-levy or non-levy of duty in certain cases
Referred to by 1
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Kothari Filaments vs Commr. of Customs (port) Kolkata
Court's Decision & Legal Precedent
When a statutory authority exercise quasi-judicial functions and pass orders resulting in confiscation of property, imposition of fines, or other civil consequences, they must comply with principles of natural justice including supply or inspection of investigative documents on which they intend to rely. An importer charged with mis-declaration is entitled to know the grounds for penalty and to have a proper hearing which includes access to investigative materials so that he may furnish an effective reply. The statutory authorities cannot use investigative findings as basis for penalty without disclosure or inspection of such documents by the affected party.
On this section: Importer and agent penalties for customs violation. Court considered whether penalties could be imposed without natural justice compliance.
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Commr. of Customs vs Sayed Ali
Court's Decision & Legal Precedent
A proper officer under Section 2(34) of the Customs Act, 1962, is only such a customs officer who has been assigned the specific functions of assessment and reassessment of duty by the Board or Commissioner of Customs. Mere appointment as an officer of Customs with territorial jurisdiction over a port is insufficient to confer proper officer status. Accordingly, a show cause notice under Section 28 of the Act for reassessment of goods cleared for home consumption can only be issued by the officer assigned assessment functions in the jurisdictional area where the bill of entry was filed and the goods were cleared, not by any other officer even if he has territorial jurisdiction over that area. In the present case, since the Commissioner of Customs (Preventive), Mumbai, was never assigned the specific function of assessment or reassessment of goods entered for home consumption under Section 28, he was not competent to issue the show cause notice, notwithstanding his territorial jurisdiction.
On this section: Penalty provisions; proposed in the show cause notice against the respondents for violation of Export Pass Book scheme conditions.
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Aban Offshore LTD vs Commnr. of Customs (import)
Court's Decision & Legal Precedent
A foreign-going vessel which enters Indian territorial waters temporarily for the purpose of undergoing repairs and which is subsequently removed from Indian territorial waters does not constitute goods imported into India for home consumption merely by reason of such entry and repair. The completion of the act of importation requires not only that the goods enter Indian territorial waters, but also that they satisfy the requirement of being intended for primary use in India (home consumption). Mere repair of a vessel does not constitute putting the vessel to use or utility in India, and therefore does not satisfy the home consumption requirement. Consequently, customs duty is not chargeable on a foreign-going vessel that enters Indian territorial waters solely for repair purposes, despite such entry technically constituting the commencement of importation. However, foreign-going vessels remain subject to the procedural and regulatory compliance requirements of the Customs Act upon entering Indian territorial waters, and violation of these procedural provisions (such as failure to file appropriate documents or deliver import manifests) remains actionable even absent the completion of import.
On this section: Provides for penalty on importer for contravention. Court held penalties maintained despite no import as procedural violations still stood.
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Commissioner of Customs, Bangalore vs Gmr Energy LTD
Court's Decision & Legal Precedent
Where imported goods under a rotable exchange programme are valued at published catalogue prices that are list unit prices established worldwide without adjustment for return of used parts, and no 'sale' occurs under the agreement, the invoice value based on such catalogue prices constitutes the proper assessable value under customs law, and additional value corresponding to returned parts cannot be added merely because used parts are returned to the foreign supplier under the agreed rotable exchange programme, absent explicit evidence in the invoices themselves showing the prices were adjusted downward to account for such returns.
On this section: Penalty provisions for mis-declaration and suppression
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The Commnr. of Customs(gen) Mumbai vs Abdulla Koyloth
Court's Decision & Legal Precedent
While the burden of proof lies on customs authorities to establish that a transaction value declared by an importer is incorrect, once it is established through credible evidence (such as market surveys conducted with the importer's acknowledgment or clear misdeclaration of goods) that the declared value does not reflect the true transaction value, the transaction value may be rejected and the sequential valuation procedure under Rules 5-8 of the Customs Valuation Rules must be applied. The findings of misdeclaration, once established through consistent evidence including admissions by the importer, must be properly examined and weighed by the appellate authority rather than being ignored or dismissed summarily. A proper remand is warranted when the appellate tribunal has failed to appreciate material evidence on record, including the importer's own statements accepting the correctness of alternative valuations.
On this section: Penalty for misdeclaration - penalty of up to Rs. 10 lakhs imposed for intentional undervaluation or misdeclaration
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Union of India vs Naman Singh Sekhawat
Court's Decision & Legal Precedent
While a departmental proceeding can lawfully be initiated against a government employee even after criminal acquittal on the same facts, such proceeding must be initiated bona fide with independent evidence the employer possesses and must be conducted in strict accordance with principles of natural justice and fair procedure. If the Inquiry Officer is biased or conducts the proceeding unfairly—such as by cross-examining the delinquent officer when a Presenting Officer is appointed, refusing to examine relevant defense witnesses without valid reason, or denying the employee adequate representation—the proceeding becomes void and cannot be validated by the appellate authority. Furthermore, if the criminal court has given positive findings of acquittal (not mere benefit of doubt) on the same core facts and these findings have not been contradicted by fresh evidence, the disciplinary authority cannot simply override such findings without basis. The standards of proof differ between criminal and departmental proceedings, but this does not permit the disciplinary authority to ignore conclusions of fact established before other competent authorities.
On this section: Customs Act proceedings—respondent's defense that goods were abandoned and found during official tour was accepted. Additional Collector held that no evidence indicated respondent's involvement in smuggling.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… The Adjudicating Authority also ordered for the confiscation of Indian Currency amounting to Rs. 14,10,990- under Section 121 of the Customs Act, 1962 and imposed a penalty of Rs. 2 lakhs upon the petitioner under Section 112 of the Customs Act, 1962. 8. Vide letter dated 03.12.2009, petitioner requested the department to encash the bank guarantee of Rs. 9,30,000/- to pay the fine of Rs. 7 lakhs and penalty of Rs. 2 lakhs imposed upon the …
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… In view of the above discussion and facts Government opines that guilt of Shri Veerendra Singh who is accused of colluding and abetting in the smuggling of the Impugned goods is clearly established. Thus, Government sets aside the impugned Order-In-Appeal and restores the Order-In-Original Imposing penalty under Section 112 of the Customs Act 1962 on Shri Veerendra Singh." 7. It may be seen that the petitioner gave incriminating statements under Section 108 of the Customs Act admitting to the recovery of 7140 memory cards from the rack of the table, as also the recovery of 2360 memory cards from his laptop bag. He admitted that he …
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… S/Shri. Ujval Jose, Joemon and Happy Kurien, partners M/s. Awesome Jewel Concepts. Thrissur were called upon to Show cause as to why: i. penalty should not be imposed on them under the provisions of Section 112(b) of the Customs Act, 1962." A common circumstance of relevance from the above-excerpted portion from the Order-in-Original can be noticed, viz . that the gold seized is in the DTA and the statements recorded are of the persons from whom the gold imported was seized from the DTA. There is no dispute on the …
Made under this section, and citing it
1 instrument names this provision in its title or its text without being made under it.
Questions about Section 112
What have the courts held on Section 112 of the Customs Act?
Kothari Filaments vs Commr. of Customs (port) Kolkata (16 Dec 2008) is the leading judgment on this section among those set out below: Importer and agent penalties for customs violation. Court considered whether penalties could be imposed without natural justice compliance. Another 5 judgments on this section are set out below, all of them from the Supreme Court. They run from 2008 to 2017.
How do I find court cases under Section 112 of the Customs Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Customs Act 1962 112, section 112 Customs Act 1962, section 112 of the Customs Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 6 reported judgments on this section are set out on this page, beginning with Kothari Filaments vs Commr. of Customs (port) Kolkata (16 Dec 2008).
What should I read with Section 112 of the Customs Act, and has it changed?
Its own text turns on section 28 (Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded), section 28AA (Interest on delayed payment of duty), section 77 (Declaration by owner of baggage), section 111 (Confiscation of improperly imported goods, etc), and on 1 further provision, so none of them can safely be read on its own. 1 other provision in this corpus refers back to it. One instrument names it without being made under it, most recently Classification of remnant fuel & oils.- Circular No.9/2018-Customs, dated 19.4.2018 (2018).
When did Section 112 of the Customs Act come into force?
Section 112 of the Customs Act, cited as Customs Act 1962 112, came into force on 01 Feb 1963, having been enacted on 13 Dec 1962. It is in force as at the date shown on this page.
Other sections of this Act
- 28. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded2145 words
- 2. Definitions1638 words
- 129A. Appeals to the Appellate Tribunal1170 words
- 27. Claim for refund of duty1060 words
- 127C. Procedure on receipt of an application under section 127B1056 words
- 138C. Admissibility of micro films, facsimile copies of documents and computer print outs as documents and as evidence872 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.