2013 (12) TMI 120 - AT - Customs

Imposition of redemption fine and penalty - Obtaining of pre-shipment inspection certificate in respect of the impugned scrap from the designated agencies - Held that - appellants have committed a breach of the Foreign Trade Regulations inasmuch as they have not obtained the necessary certificates from the listed agencies. However there are two factors which call for leniency in respect of these two cases. Firstly the impugned cargo on inspection was found not to contain any explosives or other objectionable material and secondly M/s. Bureau Veritas Miami from whom the pre-shipment certificate has been obtained have been notified as the authorised agencies for many other countries such as Singapore Philippines Oman Mauritius and several other countries - Penalty reduced - Decided partly in favour of Appellants.

Summary

Issues:
Violation of Foreign Trade Regulations regarding pre-shipment inspection certificates.

Analysis:
The judgment by the Appellate Tribunal CESTAT CHENNAI involved three appeals related to the same issue of obtaining pre-shipment inspection certificates as per the Foreign Trade Regulations. The importers had obtained certificates from a different agency than the one specified for such consignments. The adjudicating Commissioner allowed the import on payment of fines and penalties due to the absence of explosive or objectionable materials in the goods. The appellants challenged these orders in appeal.

Upon hearing both sides, the Tribunal acknowledged the breach of regulations by the appellants for not obtaining certificates from the designated agencies. However, considering that the inspected cargo did not contain any prohibited materials and that the agency from which the certificates were obtained was authorized in various other countries, the Tribunal decided to show leniency. Consequently, the Tribunal set aside the redemption fines and reduced the penalty to Rs. 10,000 in each case. The appeals were allowed partially based on these considerations.

The judgment highlights the importance of compliance with Foreign Trade Regulations, specifically regarding pre-shipment inspection certificates. It also emphasizes the Tribunal's discretion to consider mitigating factors, such as the absence of prohibited materials and the authorization of the inspecting agency in other countries, in determining the appropriate penalties for violations. The decision showcases a balanced approach by acknowledging the breach while also taking into account relevant circumstances to arrive at a fair resolution.