2023 (1) TMI 750 - AT - Customs

Appeal allowed due to proper import, goods condition, and complete certificate, rejection of fine and penalty.

The appeal was allowed as the court found that the import was not improper, the goods were in order, and the PSI certificate was complete. The Branch ... Confiscation of goods - Violation of provisions of Import Policy since the Pre-Shipment Inspection (PSI) Certificate furnished was not as per Appendix-28 of the Foreign Trade Policy - redemption of the goods in lieu of confiscation was allowed on payment of redemption fine - penalty imposed under Section 112(a) of the Customs Act, 1962. Whether the PSI certificate submitted by the appellant-importer was sufficient compliance with Appendix-28 ibid. and that the authorities are justified in ordering confiscation and offering redemption fine in lieu of the same? HELD THAT:- In the first place, there should be an improper import of goods leading to confiscation of the same. Here, there is no dispute that the PSI certificate which was furnished was complete in all respects, except the fact that the same was issued by the Branch Office. This implies that the Revenue has recognized and accepted the Branch Office of the issuing agent, but does not want to accept the certificate issued by the Branch. For this alleged violation, the goods were subjected to 100% examination by the authority, but the same did not result in detection of remnants of arms and ammunition or of any banned or objectionable substances. Thus, the goods were found to be in order and as declared in the Bill-of-Entry. Despite this, the Adjudicating Authority proceeds to hold that the import was improper and orders for confiscation of the goods in question which, according to me, is not due to any violation as described under the statute. The authorities have found that the violation, if any, has not resulted in any specified categories of items being imported or that there was any reason to hold that there has been an improper importation of the goods in question, resulting in confiscation of the same. To put it in simple terms, the goods have not been imported contrary to any prohibition imposed by or under the Act or contrary to any prohibition imposed by any other law for the time being in force. This is because the import is subject to fulfilment of stipulated condition, failing which the only consequence prescribed is the 100% inspection of the entire consignment. This, ipso facto, therefore, would not tantamount to improper import of goods within the meaning of Section 111(d) of the Act. Consequently, the authorities below are not justified in demanding redemption fine and penalty under Section 112(a) of the Act. The impugned order cannot sustain and therefore, the same is set aside - Appeal allowed. Issues Involved:Whether the PSI certificate submitted by the appellant-importer complied with Appendix-28 of the Foreign Trade Policy and if the authorities were justified in ordering confiscation and offering redemption fine in lieu of the same.Detailed Analysis:1. The appeal was filed against the Order-in-Appeal confirming findings of the Adjudicating Authority regarding violation of Import Policy due to an inadequate PSI certificate, allowing redemption of goods on payment of fine, and imposing a penalty under Section 112(a) of the Customs Act, 1962.2. The main issue was whether the PSI certificate met the requirements of Appendix-28 and if confiscation and redemption fine were justified.3. The appellant argued that the PSI certificate from the Branch Office was valid, while the Revenue contended it was not listed in Appendix-28.4. The Public Notice required a specific PSI certificate for metal scraps, failing which 100% examination and penal action were mandated.5. Despite 100% examination not revealing any banned substances, the dispute centered on the validity of the PSI certificate issued by the Branch Office.6. The appellant cited precedents from the Gujarat High Court where similar situations led to dismissal of appeals due to proper inspection certificates.7. The Revenue referenced Kolkata CESTAT orders where defective PSI certificates resulted in confiscation, contrasting with the present case where no defects were found.8. The judgment emphasized that the import was not improper as the goods were in order, the PSI certificate was complete, and the Branch Office's issuance was later ratified by the DGFT.9. Considering the lack of improper importation, the appeal was allowed, rejecting the redemption fine and penalty imposed by the authorities.10. The impugned order was set aside, and the appeal was allowed with consequential benefits as per law.