Non-production of BIS certificate does not itself make freely importable goods prohibited; absolute confiscation and penalty fail.

Skimmed milk powder imported under DFIA was treated as freely importable and not prohibited under the Customs Act, the Foreign Trade Policy, or any other law. Non-production of a BIS certificate was held to be, at most, a breach of a certification condition and not enough to convert the goods into prohibited goods under Section 2(33) of the Customs Act, 1962. Because the import had also been tested and cleared under the domestic food safety regime, absolute confiscation and the consequential penalty were unsustainable; redemption, rather than complete confiscation, was the maximum consequence indicated on these facts.

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Issues: Whether skimmed milk powder imported under DFIA could be treated as prohibited goods and absolutely confiscated for non-production of a BIS certificate, and whether penalty could be sustained.

Analysis: The goods were found to be freely importable and not shown to be prohibited under the Customs Act, the Foreign Trade Policy, or any other law. Non-production of a BIS certificate, at the highest, amounted to breach of a condition or restriction and did not by itself convert the goods into prohibited goods within the meaning of Section 2(33) of the Customs Act, 1962. The import had also undergone FSSAI testing and was cleared under the domestic food safety regime, while the BIS framework relied upon by the department was held not to make the importer liable for absolute confiscation in these facts. In the absence of prohibition, complete confiscation and consequential penalty were held unsustainable; at most, the goods could have been considered for redemption.

Conclusion: The goods were not prohibited goods, absolute confiscation was not warranted, and the penalty could not be sustained.

Final Conclusion: The appeal succeeded and the imported goods were held liable neither to confiscation nor to penalty.

Ratio Decidendi: Mere non-compliance with a certificate requirement does not convert otherwise freely importable goods into prohibited goods unless import is expressly prohibited by law.

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