2014 (5) TMI 448 - AT - Customs

Waiver of Pre-deposit for admission of appeal - Import of Re-rolling Scrap - Pre-Shipment Inspection Certificate of DGFT - Held that - Prima facie, it appears that there was no intention to contravene any of the provisions of the law and assessee had complied with the provisions to the best of their knowledge and no harm has been caused by import of prohibited goods Although, there appears to be a technical violation - The issue whether fine and penalty needs to be imposed in such circumstances can be examined at the time of appeal hearing - It is proper to waive the requirement of pre-deposit of penalty arising from the impugned order for admission of appeal - stay granted.

Summary

Issues:
Violation of legal requirement for certificate recognition at port of export; Confiscation of goods under section 111(d) of Customs Act, 1962; Imposition of redemption fine and penalty; Appeal for waiver of pre-deposit of penalty.

Analysis:
The case involved the import of steel scrap with 16 Bills of Entry, accompanied by a Pre-Shipment Inspection Certificate stating no arms or ammunition. However, Revenue contended that a certificate specifically for arms and ammunition from a recognized agency at the port of export was required. The goods were confiscated under section 111(d) of the Customs Act, with a redemption fine of Rs.45 lakhs and a penalty of Rs.4 lakhs imposed, later reduced by the Commissioner (Appeals) to Rs.1,00,000 each.

The applicant argued that the certificates were issued by a recognized agency, albeit not recognized by DGFT for the port of export. The legal requirement for recognition at each port separately came into force post the consignments' export dates. The advocate contended that since the legal requirement was unclear at the time of export, the default in producing the certificate should not be a major offence, requesting the appeal admission without any deposit.

The Revenue opposed, citing a violation of DGFT-prescribed law, and requested an appropriate pre-deposit. Upon considering both arguments, the judge observed no intention to contravene the law and a technical violation. The issue of imposing fines and penalties could be examined during the appeal hearing. The judge decided to waive the pre-deposit requirement for the penalty from the impugned order for appeal admission, with a stay on collecting dues during the appeal's pendency.

In conclusion, the judgment addressed the technical violation regarding the certificate recognition at the port of export, the confiscation of goods under the Customs Act, the imposition of fines and penalties, and the decision to waive the pre-deposit for the penalty during the appeal process.