Procedural defect in inspection certificate led to reduction of redemption fine and penalty after full examination found no prohibited goods.

A procedural defect in a pre-shipment inspection certificate, where the goods were otherwise subjected to full examination and no prohibited material was found, did not justify maintaining disproportionate redemption fine and penalty at the original level. The defect was treated as procedural rather than substantive, so the confiscation-related consequences were not disturbed, but the monetary consequences were reduced substantially in favour of the assessee. The order was accordingly modified to reflect the lesser fine and penalty.

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Issues: Whether non-production of a pre-shipment inspection certificate from a branch office of an enlisted inspection agency, after 100% examination of the consignment and absence of any prohibited goods, justified confiscation with redemption fine and penalty at the level imposed.

Analysis: The importer had produced a pre-shipment inspection certificate, but it was issued by a branch office not specifically enlisted under the applicable procedure. The consignment was nevertheless subjected to 100% examination and no arms, ammunition, or banned substances were found. In these circumstances, the defect in the certificate was treated as a procedural violation rather than a substantive taint to the import. The quantum of redemption fine and penalty was found to be excessive, especially in view of the full examination already undertaken and the delay and cost borne by the importer.

Conclusion: The confiscation-related consequences were not set aside, but the redemption fine and penalty were reduced substantially in favour of the assessee.

Final Conclusion: The appeal succeeded only to the extent of reduction of the monetary consequences, and the impugned order stood modified accordingly.

Ratio Decidendi: Where a procedural defect in the pre-shipment inspection certificate is the only irregularity and the goods are found fit after complete examination with no prohibited material detected, disproportionate redemption fine and penalty are liable to be reduced.

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