TaxTMI 
TaxTMI 
2026 (7) TMI 27
X X X X Extracts X X X X
X X X X Extracts X X X X
.... had been issued by M/s Asia Inspection Agency Ltd. In the said PSIC, place of inspection was mentioned Port Louis, Mauritius. As per the DGFT Public Notice No. 48/2015-20 dated 05.01.2023, Mauritius is not mentioned anywhere in the area of operation of M/s Asia Inspection Agency Ltd. As per para 2.52(e) of the Hand-Book of Procedure, 2023, a Pre-Shipment Inspection Agency ('PSIA') can carry out inspection only in the countries which fall under its area of operations. It was observed that Mauritius country was not the notified area of operation of M/s Asia Inspection Agency Ltd and accordingly, the Department treated the said PSIC as invalid. On this basis, it appeared that the Appellant had contravened the provisions of Sections 46(4) and 46(4A) of the Customs Act, 1962, read with the relevant DGFT notifications and guidelines. Hence, according to the Department, the goods so imported fall under the category of restricted goods which fall under the definition of 'prohibited goods' as defined under Section 2(33) of the Act. Accordingly, the impugned goods were seized under Section 110 of the Act on the reasonable belief that the same appeared liable to confiscation under Section 11....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the offending goods having been imported in compliance with the provisions of Customs Act. For any violation of Customs Law as well as DGFT notifications by an inspecting agency, the Appellant cannot be saddled with the deterrent consequences including the one of 'reexport'. 4.5 She further submits that the Department has erred in invoking the provisions relating to 'prohibited goods' under Section 2(33) of the Customs Act without appreciating that the goods in question were at best restricted goods subject to regulatory compliance and not absolutely prohibited goods. 4.6 She further submits that the penalties imposed on the Appellant under Sections 112 & 114AA are also not legally sustainable because there is no fault at the end of the Importer Appellant. 4.7 In support of her submissions, she places reliance on the following decisions: * Moolchand Steels Pvt Ltd vs. CC, Kandla - [2006 (206) ELT 793 (Tri. Del.)] affirmed by the Hon'ble Gujarat High Court - [2008 (221) ELT A118 (Guj.)] * CC vs. Senor Metals Pvt Ltd - [2009 (236) ELT 445 (Guj.)] * NGA Steels Pvt Ltd vs. CC, Chennai - [2010 (262) ELT 578 (Tri. Chennai) * Shri Shakti Iron ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct. Further, we find that though the said agency was empanelled with the DGFT but the only lapse was that it was not authorized for that area where the inspection took place. But, subsequent, on the request of the Appellant, Post Shipment Inspection was allowed because the DGFT Policy nowhere prohibits the Post Shipment Inspection. On Post Shipment Inspection, nothing objectionable material was found in the impugned goods because the said goods did not contain any war material etc. 7. We also find that it is not disputed that the goods were inspected in Port Louis, Mauritius by the agency which is an empanelled agency of DGFT. The only lapse was that the said agency was not authorized to operate in Mauritius. Further, we find that when the local empanelled agency inspected the goods and issued the PSIC and did not find any objectionable material in the impugned goods, then it is a substantial compliance of the DGFT Policy. 8. We also find that this issue has been considered recently by the Ahmedabad Bench of this Tribunal in the case of Palco Recycle Exchange Limited vs. Commissioner of Customs [2026 (3) TMI 1094 - CESTAT Ahmedabad], wherein also similar violation was there a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing material was found in consignment, radiation level was not found in excess of neutral background, noncompliance of the condition of import policy may entail 100% inspection of goods but would not tantamount to improper import of goods liable to confiscation under Section 111 of the Customs Act, 1962. Abetment was also not proved. Imposition of penalty under Section 112(a) was set-aside. 5.4 In the factual matrix, there is no sufficient evidence that the appellants have abetted in production of invalid PSIC to make import of prohibited goods by contravening Foreign Trade Policy. Therefore, relying on the above decisions, we allow the appeals filed by M/s. Palco Recycle Exchange Limited, Shri Pramod Kumar Ramanlal Agarwal, (Appellant 2) and Shri Vishal Gupta, Vice President of M/s. Vistas Trading, New Delhi (Appellant 3) and set-aside the impugned order to the extent of confiscation of seized goods, imposition of Redemption fine and penalty on the above three appellants." 9. Further, we also find that in the case of Commissioner of Customs vs. Senor Metals Pvt Ltd (supra), the Hon'ble Gujarat High Court has held as under: "10. Section 111(d) of the Act permit....