2026 (3) TMI 1547 - AT - Customs

Customs penalty unsustainable where goods were cleared on an authorised pre-shipment certificate and no contrary evidence was produced.

Penalty under Section 112 of the Customs Act, 1962 was unsustainable where imported goods had been cleared on the basis of a pre-shipment certificate ... Validity of pre-shipment certificate - Imposition of Penalty under Section 112 of the Customs Act - import on the basis of the pre-shipment certificate - clearance of goods - Absence of Corroborative evidence - Burden of proof. Validity of pre-shipment certificate - Penalty under Section 112 of the Customs Act - HELD THAT: - The Tribunal found that the goods had originally been assessed and cleared by Customs on the strength of the pre-shipment certificate, without any objection at the time of assessment. It further noted the letter of the Deputy High Commission of the People's Republic of Bangladesh certifying that the College of Textile Technology, now Bangladesh University of Textiles, was a government organisation authorised to issue certificates regarding AZO and hazardous dyes. In the absence of any corroborative evidence from the Revenue to dislodge that position, the certificate was held to be a valid document. On that basis, the earlier clearance was found proper and no offence justifying penalty under Section 112 was made out. [Paras 10, 11] The penalty was set aside as no contravention warranting action under Section 112 was established. Final Conclusion: The Tribunal held that the pre-shipment certificate issued by Bangladesh University of Textiles was valid and that the Revenue had produced no material to prove otherwise. Consequently, the penalty imposed on the appellant was set aside and the appeal was allowed. Issues: Whether the penalty imposed under Section 112 of the Customs Act, 1962 was sustainable when the goods were cleared on the basis of a Pre-Shipment Certificate issued by Bangladesh University of Textiles.Analysis: The goods were assessed and cleared by the Customs authorities on the basis of the Pre-Shipment Certificate, and no objection was raised at the time of clearance. A prior communication from the Deputy High Commission of the People's Republic of Bangladesh certified that the institution, then known as the College of Textile Technology and later as Bangladesh University of Textiles, was a government organisation authorised to issue certificates regarding AZO and hazardous dyes. No contrary corroborative evidence was produced by the Revenue to discredit that certificate or to show any offence by the importer.Conclusion: The Pre-Shipment Certificate was held to be valid, and the appellant was found not to have committed any offence warranting penalty under Section 112 of the Customs Act, 1962.Final Conclusion: The penalty was set aside and the appeal was allowed with consequential relief.Ratio Decidendi: When imported goods are cleared on the basis of a certificate that is shown to be issued by an authorised body and the Revenue produces no contrary evidence, penalty under Section 112 of the Customs Act, 1962 cannot be sustained.