Brass scrap import appeal dismissed for mis-declaring Pakistan origin as UAE with fake inspection certificate

CESTAT New Delhi dismissed the appeal involving import of brass scrap with mis-declared country of origin. Physical examination revealed goods originated from Pakistan, not UAE as declared, evidenced by Pakistani markings on bags and shipping documents showing direct routing from Karachi. The Pre-Shipment Inspection Certificate was deemed fake. HC upheld confiscation under Section 111(m) for non-correspondence with bill of entry declarations. Penalties under Sections 112(a)(ii) and 114AA were justified. Goods were reclassified under CTH 98060000 attracting 200% duty per Notification 5/2019. Re-export was permitted with redemption fine, as notification contained no express bar on re-export.

---

---

Issues Involved:
1. Country of Origin of the Goods
2. Responsibility of the Importer Company
3. Confiscation of Goods
4. Penalty under Section 112(a)(ii) and 114AA of the Customs Act
5. Re-export and Redemption Fine with Penalty

Summary:

Country of Origin:
The primary issue was whether the imported brass scrap originated from Pakistan or UAE. The container tracking on the Pakistani International Container Terminal (PICT) revealed that the container originated from Pakistan, contradicting the Pre-Shipment Inspection Certificate (PSIC) which indicated UAE as the origin. Physical examination of the goods also found markings indicating Pakistan as the origin. The Tribunal concluded that the goods originated from Pakistan, making the PSIC certificate fake and the goods subject to reclassification under CTH 98060000 as per Notification No. 05/2019-Cus dated 16.02.2019.

Responsibility of the Importer Company:
The importer company claimed ignorance about the country of origin, stating they relied on intermediaries. However, the Tribunal held that the importer, being a reputed company and a regular importer, is responsible for ensuring the accuracy of the country of origin and cannot plead ignorance. The importer and exporter are jointly responsible for the material imported as per the Handbook of Procedures 2015-2020.

Confiscation of Goods:
The Tribunal upheld the confiscation of goods under Section 111(m) of the Customs Act, 1962, as the goods were mis-declared in terms of their country of origin. The import violated the Foreign Trade Policy and lacked a valid PSIC. The goods were liable for confiscation as they did not correspond with the entry made under the Customs Act.

Penalty under Section 112(a)(ii) and 114AA of the Customs Act:
The Tribunal affirmed the penalties imposed on the importer company and its director under Sections 112(a)(ii) and 114AA of the Customs Act. The penalties were justified as the importer knowingly mis-declared the country of origin. The quantum of penalty was also deemed appropriate, aligning with the statutory provisions.

Re-export and Redemption Fine with Penalty:
The Tribunal allowed the re-export of the confiscated goods on payment of redemption fine and enhanced penalties. The decision was in line with the objective of Notification No. 05/2019, which aimed to impose a high duty on goods originating from Pakistan. The Tribunal referenced various judicial precedents to support the decision that re-export is permissible and that both redemption fine and penalties are applicable even when goods are allowed to be re-exported.

Conclusion:
The Tribunal dismissed all appeals filed by the importer company, its director, and the Department, affirming the confiscation of goods, imposition of penalties, and the allowance for re-export on payment of redemption fine and penalties. The decision upheld the legal provisions and objectives of the Customs Act and related notifications.

---