2023 (7) TMI 779 - AT - Customs

Seeking provisional release of goods - non-compliance with the mandatory requirement of producing a Pre-Shipment Inspection certificate as required under para 2.32 of Hand Book of Procedures of Foreign Trade Policy 2004-09 - Confiscation - redemption fine - penalty - HELD THAT - The appellant has not complied with the requirement of producing a Pre-Shipment Inspection certificate as required under para 2.32 of Hand Book of Procedures. The goods have been subjected to 100% examination. There are no remnants of arms or ammunitions or any banned substances. Ld. Counsel for appellant has relied upon various decisions to argue that the goods have been subjected to 100% inspection and that the non-compliance of the requirement of production of PSI certificate would be only a procedural infraction and would not tantamount to improper import of goods - it is noted that after inspection of the goods there is no prohibited goods or banned substances. The original authority has imposed redemption fine of Rs.10, 42, 820/- and penalty of Rs.4, 46, 922/- which is on the higher side. The decisions relied by the Ld. Counsel for appellant show that courts have been lenient to set aside the redemption fine and penalties. In the decision relied by the Ld. A.R the redemption fine and penalty has been reduced. Taking into consideration that the goods have been subjected to 100% examination and the fact that the appellant had borne the cost of such examination as well as the delay in clearance of goods we are convinced that redemption fine and penalties imposed are too excessive - the redemption fine reduced to Rs.1, 00, 000/-- (Rupees One lakh only) and the penalty is reduced to Rs.50, 000/- (Rupees Fifty thousand only). Appeal allowed in part.

Summary

Issues involved:
The judgment involves the issue of non-compliance with the requirement of producing a Pre-Shipment Inspection certificate as per the Hand Book of Procedures. The appellant imported goods, steel scrap, which were provisionally released but later faced confiscation and penalties due to the certificate being issued by a branch office instead of the main agency listed in the Handbook.

Details of the judgment:
The appellant argued that the goods underwent 100% examination and no prohibited items were found, making the non-compliance a procedural infraction rather than improper import. Various legal precedents were cited to support this argument, emphasizing that courts have been lenient in such cases. The original authority imposed a high redemption fine and penalty, which was considered excessive by the Tribunal.

In analyzing similar cases, the Tribunal noted that non-compliance with the certificate format or agency listing had led to reduced fines and penalties, or even complete waivers. The Tribunal found the redemption fine of Rs.10,42,820/- and penalty of Rs.4,46,922/- to be too high given the circumstances. Therefore, the Tribunal reduced the redemption fine to Rs.1,00,000/- and the penalty to Rs.50,000/-, considering the appellant's compliance with the examination process and the absence of banned substances in the goods.

The judgment highlights the importance of complying with procedural requirements while importing goods, but also acknowledges the need for proportionate penalties in cases where no violations of substance are found. The decision serves as a reminder that penalties should be reasonable and commensurate with the actual violations committed, especially when no harm or illegal activity is detected during inspections.