2014 (2) TMI 14 - AT - Customs

Import of metal scrap - Pre-shipment inspection certificate not obtained - Imposition of redemption fine and penalty - Held that - appellants are required to obtain and produce pre-shipment inspection certificate for importing the impugned metal scrap. They have produced a certificate from M/s. Alex Stewart (Assayers) Geo, who are also notified as the authorized agency at S. No. 1, 25 & 61 with address of their branches at Rotterdam, Australia and England. They have not been notified with reference to their branch at Singapore. As such, violation by the appellants is a technical one in the sense they should have gone to M/s. Intertek Testing Services Ltd. at Singapore rather than M/s. Alex Stewart, to obtain the necessary PSI Certificate. Apart from that on examination no explosive material had been found in the consignment - Redemption fine set aside - Decided partly in favour of assessee.

Summary

Issues:
Penalty for importing metal scrap without pre-shipment inspection certificate from authorized agent.

Analysis:
The appellants were penalized for importing metal scrap without obtaining a pre-shipment inspection certificate from an authorized agent listed in the Handbook of Procedures. The appellant's consultant argued that they had obtained a certificate from a different agency, M/s. Alex Stewart (Assayers) Geo, and had also shown that the goods did not contain any explosive materials during examination. The consultant requested leniency in reducing the fine and penalty. On the other hand, the respondent argued that the agency notified for the origin of the goods was M/s. Intertek Testing Services Ltd., and since the appellants did not obtain the certificate from them, the imposed fine and penalty were justified.

Upon hearing both sides, the judge found that the appellants were indeed required to obtain and present a pre-shipment inspection certificate for importing the metal scrap in question. The appellants had obtained a certificate from M/s. Alex Stewart (Assayers) Geo, which was an authorized agency at specific locations but not at the branch in Singapore, from where the goods originated. This technical violation meant that the appellants should have obtained the necessary PSI Certificate from M/s. Intertek Testing Services Ltd. in Singapore. Despite this violation, no explosive material was found in the consignment during examination. Considering these factors, the judge took a lenient view and decided to set aside the redemption fine while retaining the penalty of Rs. 10,000 imposed on the appellants.

In conclusion, the appeal was partly allowed with the decision to set aside the redemption fine while maintaining the penalty. The judgment highlighted the importance of obtaining pre-shipment inspection certificates from the correct authorized agencies as specified in the relevant procedures.