Pre-shipment inspection certificate requirements cannot support penalties where compliance is impossible or imposed on the wrong party.

A pre-shipment inspection certificate was treated as a clearance condition for the importer, not a requirement binding shipping lines under the Customs Act, so penalty under section 112 was held unsustainable against the shipping lines. Where no specified agency had been notified in the country of export, compliance with the certificate requirement was impossible; given that the goods were fully examined by customs and no ineligible import was alleged, confiscation, fine and penalty on the importer were held unjustified. The stated principle is that a penalty cannot be imposed for breach of a condition fastened on another party, and an impossible import condition cannot be enforced to sustain confiscation or penalty.

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Issues: (i) whether the penalty imposed on the shipping lines under section 112 of the Customs Act, 1962 was sustainable for permitting loading of goods without a pre-shipment inspection certificate; (ii) whether confiscation, fine and penalty imposed on the importer were justified when no specified agency was available in the country of export for obtaining the required certificate.

Issue (i): whether the penalty imposed on the shipping lines under section 112 of the Customs Act, 1962 was sustainable for permitting loading of goods without a pre-shipment inspection certificate.

Analysis: The requirement of a pre-shipment inspection certificate was held to be a condition cast upon the importer for clearance of the goods. The Foreign Trade Policy governed importers and exporters, and its stipulations did not bind shipping lines. The Customs Act provisions referred to were concerned with unloading and declarations while the vessel was within customs waters, and no provision of Chapter VI required production of such a certificate by the shipping lines. The proceedings against them were treated as an extension of the action against the importer, without any supporting legal provision.

Conclusion: The penalty under section 112 of the Customs Act, 1962 was not sustainable against the shipping lines and was set aside in their favour.

Issue (ii): whether confiscation, fine and penalty imposed on the importer were justified when no specified agency was available in the country of export for obtaining the required certificate.

Analysis: The record showed that no specified agency had been notified for Fiji, making compliance practically impossible. The goods had also been subjected to 100% examination by Indian customs, and no ineligible import was alleged. The requirement was therefore incapable of compliance in the given factual setting, and insistence upon it would offend the principle that the law does not compel impossibilities.

Conclusion: The confiscation, fine and penalty imposed on the importer were unjustified and were set aside in the importer's favour.

Final Conclusion: The Tribunal held that neither the shipping lines nor the importer could be visited with the impugned penalties on the facts and statutory framework considered, and all appeals succeeded.

Ratio Decidendi: A penalty cannot be imposed on a person for non-compliance with a clearance requirement that the law fastens on another party, and an import condition incapable of performance because the prescribed mechanism does not exist in the country of export cannot be enforced to sustain confiscation or penalty.

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