Pre-shipment inspection compliance defeats waiver of penalty for shipping lines handling metal scrap consignments containing contraband.

A shipping line that accepts metal scrap must comply with the prescribed pre-shipment inspection requirement, and reliance on a shipping certificate alone is insufficient where no valid certificate from a notified agency is produced. The absence of contraband in some containers does not justify waiver of penalty when the penalties relate to segregated consignments containing prohibited articles. On that basis, the stay applications were rejected, no interference was made with the penalties, and deposit of the amounts was required to keep the appeals alive.

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Issues: Whether the stay applications could be allowed against penalties imposed on the shipping line in respect of consignments containing contraband scrap, and whether the absence of physical verification of cargo or the absence of contraband in some containers could justify waiver of the penalty.

Analysis: The applications were founded on contentions already dealt with in an earlier order. The absence of contraband in some containers did not alter the position because the penalties related to consignments that did contain prohibited articles and those consignments had been segregated. The Court also relied on Public Notice No. 20/2004 dated 19-10-2004, under which shipping lines were advised not to accept metal scrap unless accompanied by a pre-shipment inspection certificate from a notified agency in terms of Appendix 28 of the Foreign Trade Policy. Since no certificate from the notified agency was produced, the plea that the shipping line could not physically verify the cargo and could rely on the certificate was held to be without substance.

Conclusion: The stay applications were rejected and no interference was made with the penalties imposed; the appellants were required to deposit the amounts to keep the appeals alive.

Ratio Decidendi: A shipping line accepting metal scrap must ensure compliance with the prescribed pre-shipment inspection requirement, and the absence of a valid certificate from the notified agency defeats a plea for waiver of penalty.

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