2016 (6) TMI 1068 - AT - Customs

Tribunal overturns confiscation and penalties for imported scrap due to missing inspection certificate

M/s Bhushan Steel Ltd. Versus The Commissioner, C&CE, Visakhapatnam

M/s Bhushan Steel Ltd. Versus The Commissioner, C&CE, Visakhapatnam - 2016 (336) E.L.T. 699 (Tri. - Hyd.) Issues:Challenge of confiscation of imported shredded scrap and imposition of penalty for lack of valid pre-shipment inspection certificate.Analysis:1. The appellant contested the confiscation of imported shredded scrap and the penalty imposed due to the absence of a valid pre-shipment inspection certificate. The appellant imported shredded scrap from Norway and was required to provide a pre-shipment inspection certificate as per the Hand Book of Procedures. The consignment had a Pre-shipment Inspection Certificate (PSIC) from an agency authorized for various countries but not specifically for Norway. The department confiscated the goods citing non-compliance with the prescribed condition, offering redemption on payment of a fine and imposing a penalty. The appellant argued substantial compliance with the PSIC requirement, citing precedents and contending that the confiscation was unjustified.2. The department argued that since Norway was not listed in the Public Notice by DGFT India, the import of goods from Norway was implied to be prohibited. Referring to the definition of prohibited goods under the Customs Act, it was asserted that the goods were rightly confiscated due to non-compliance with the Handbook Procedures. The department maintained that the redemption fine and penalty were reasonable and justified.3. The Tribunal reviewed the submissions and observed that the goods met conditions except for the absence of a valid PSIC specifically for Norway. While the agency issuing the PSIC was authorized for many countries, Norway was not mentioned in the list. The Tribunal disagreed with the department's argument that import from Norway was completely restricted due to non-listing in the Public Notice. Citing policy Circulars and the lack of objectionable items in the goods post-inspection, the Tribunal found the department's stance unreasonable. Referring to past judgments, the Tribunal set aside the confiscation and penalty based on the exporter's responsibility to furnish documents and the absence of specified categories of prohibited items in the import.4. The Tribunal referenced previous judgments to support its decision, emphasizing that the importer should not be penalized for the exporter's lapse in fulfilling conditions. The Tribunal highlighted that while non-compliance may require additional inspection, it does not amount to improper import of goods as per the Customs Act. Based on the legal principles established in the cited cases, the Tribunal allowed the appeal, overturning the impugned order of confiscation and penalty imposition.In conclusion, the Tribunal allowed the appeal, providing consequential reliefs to the appellant, based on the legal principles and precedents discussed in the judgment.