Procedural defect in pre-shipment inspection certificate does not by itself justify confiscation when goods contain no objectionable material.

A procedural defect in a Pre-Shipment Inspection Certificate, such as issuance by an empanelled agency outside its notified area of operation, does not by itself make imported goods prohibited or liable to confiscation when later inspection shows no objectionable material. The text states that where the consignment is free from war material or other incriminating content and the import policy requirement has been substantially met, the defect is treated as a compliance lapse rather than a basis for confiscation, redemption fine, or penalties under the Customs Act.

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Issues: Whether an imported consignment could be treated as prohibited and confiscated, and penalties imposed, merely because the Pre-Shipment Inspection Certificate was issued by an empanelled agency outside its notified area of operation, when the goods were later inspected and found to contain no objectionable material.

Analysis: The import was accompanied by a Pre-Shipment Inspection Certificate issued by an agency empanelled with the DGFT, but the inspection location was not within that agency's notified area of operation. The goods were nevertheless subjected to subsequent inspection, and no war material or other objectionable material was found. In these circumstances, the defect in the certificate was treated as a lapse in compliance with the import procedure, not as a circumstance converting the goods into prohibited goods under the Customs Act. The non-compliance was held not to justify confiscation, redemption fine, or penalties where the consignment itself was free from incriminating material and the policy requirement had been substantially met.

Conclusion: The confiscation, redemption fine, and penalties were set aside, and the appeal was allowed in favour of the assessee.

Ratio Decidendi: A procedural defect in the Pre-Shipment Inspection Certificate does not by itself render the imported goods prohibited or liable to confiscation under Section 111(d) of the Customs Act, 1962, where the consignment is found free from objectionable material and the import policy conditions are substantially complied with.

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