2014 (11) TMI 815 - AT - Customs

Confiscation of goods - Redemption fine and penalty - performing office M/s.Bureau Veritas, Madagascar does not figure in Appendix 28 of Hand Book of Procedures (Vol.I) - Held that - The goods were examined and found to be as declared. Further, the goods were accompanied with pre-shipment certificate of M/s.Bureau Veritas, Mumbai along with certificate of M/s.Bureau Veritas, Madagascar. following the decision of Senor Metals Pvt. Ltd. (2008 (8) TMI 238 - GUJARAT HIGH COURT), the impugned order is set aside

Summary

Issues:
1. Confiscation of goods and imposition of redemption fine and penalty under Section 112(a) of the Customs Act, 1962 for failure to produce a specified Pre-shipment Inspection Certificate as required under Appendix 28 of the Handbook of Procedures (Vol.I).
2. Dispute regarding breach of Foreign Trade regulations and the liability to pay penalty for not obtaining a Pre-shipment Inspection Certificate before importing scrap.
3. Interpretation of legal obligations on exporters and importers in furnishing specified documents and compliance with stipulated conditions for importation of goods.
4. Application of Section 111(d) of the Act for confiscation of improperly imported goods and the distinction between contravention of prohibitions and non-compliance with stipulated conditions.
5. Comparison with previous judgments regarding similar situations and the relevance of 100% inspection of consignments in determining the legality of importation.

Analysis:
1. The appellant imported goods declared as re-rollable scrap without a Pre-shipment Inspection Certificate listed in Appendix 28, leading to confiscation, redemption fine, and penalty. The appellant argued citing precedents where fines and penalties were set aside in similar cases, emphasizing the certificate's issuance by an unlisted office.
2. The Revenue contended that breach of Foreign Trade regulations necessitated the certificate, citing a Tribunal decision holding importers liable for penalties in such cases. The distinction was drawn with a Gujarat High Court case where the Pre Shipment Agency number was mentioned during import.
3. The Tribunal analyzed the exporter's obligation to provide specified documents and the importer's compliance with conditions for importation. It highlighted that the importer produced the required certificate, and any violation by the exporter should not penalize the importer if no prohibited items were imported.
4. Section 111(d) was examined for confiscation provisions, clarifying that non-compliance with stipulated conditions does not equate to improper importation under the Act. Previous judgments supported this interpretation, emphasizing the need for 100% inspection in case of non-compliance.
5. The Tribunal found that the goods were as declared and accompanied by certificates, aligning with the Gujarat High Court's decision in a similar case, leading to setting aside the impugned order and allowing the appeal based on precedent and compliance with inspection requirements.

This detailed analysis of the judgment covers the issues involved comprehensively, addressing legal obligations, precedents, and interpretations of relevant provisions for a thorough understanding of the case.