2006 (10) TMI 60 - AT - Customs

Confiscation & Penalty Appellant have produced pre-shipment certificate of a non-certified agency and accordingly redemption fine and penalty imposed on him Authority after considering the situation allowed the appeal partly.

Summary

Issues:
1. Validity of pre-shipment inspection certificate from a specified agency.
2. Alleged violation of Import Export Policy.
3. Confiscation of goods under Section 111(d) of the Customs Act, 1962.
4. Reduction of redemption fine and penalty due to technical nature of the offense.

Analysis:

Issue 1: Validity of pre-shipment inspection certificate
The case involved the import of Electrolyte Tin Plate Sheets Waste/Waste by the respondent, requiring a pre-shipment inspection certificate from a specified agency as per the Import Export Policy. The appellants presented a certificate from BSI Inspectorate America Corporation, which was not the specified agency. The Commissioner (Appeals) overturned the original order, citing lack of knowledge about the agency's blacklisting. However, the Tribunal held that the certificate from BSI Inspectorate America Corporation did not meet the policy requirements, leading to a violation.

Issue 2: Alleged violation of Import Export Policy
The respondent argued that despite the certificate being from BSI, which they believed to be a specified agency, the goods underwent 100% examination by a local agency with no contraband found. They contended that the scrap met policy specifications, justifying leniency for unconditional release without fines or penalties. However, the Tribunal found a violation of the policy due to the use of a non-specified agency for the inspection certificate, leading to the liability of goods confiscation under Section 111(d) of the Customs Act, 1962.

Issue 3: Confiscation of goods under Section 111(d) of the Customs Act, 1962
Despite acknowledging the absence of any malicious intent, the Tribunal deemed the use of an incorrect inspection agency as a technical offense warranting action. Considering the circumstances of the import and the absence of contraband, the Tribunal reduced the redemption fine from Rs. 2,75,000/- to Rs. 10,000/- and the penalty from Rs. 50,000/- to Rs. 2,500/-. The appeal was partly allowed based on this assessment.

Issue 4: Reduction of redemption fine and penalty
The Tribunal's decision to reduce the redemption fine and penalty was based on the technical nature of the offense, lack of mala fide intent, and the overall circumstances surrounding the import. By considering the inspection certificate from BSI and the absence of any illicit materials, the Tribunal opted for a more lenient approach in imposing fines and penalties, reflecting a balance between enforcement and mitigating factors.

This comprehensive analysis highlights the key legal aspects, policy compliance, enforcement measures, and the Tribunal's nuanced approach in addressing the violations while considering the specific circumstances of the case.