Pre-Shipment Inspection Certificate mandatory at the Time of Clearance of Goods by an Importer, Steamer Agent has No Locus of responsibility: CESTAT sets aside Customs penalty u/s 112(a) [Read Order]

The pre-shipment inspection certificate is mandatory at the time of clearance of the goods by an importer, any other person including Steamer Agent has no locus of responsibility, the Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside the penalty under section 112(a) of the Customs Act, 1962.

There was an import of Aluminium Scrap vide Bill-of-Entry No. 3592939 dated 24.05.2011; the IGM was filed by the appellant, M/s. Caravel Logistics Private Limited who is a Steamer Agent, on 22.01.2011; that the said consignment had remained uncleared, for which reason the Custodian had issued a notice dated 05.03.2011 under Section 48 of the act to the importer.

since there was no response from the importer, the goods were examined and valued by a Government approved valuer appointed by the Custodian, in the presence of Customs Officials (wherein the goods were found to be Aluminium Scrap and no action was initiated up to 24.12.2020. A Show Cause Notice under Section 124 on both the importer as well as the appellant, proposing to confiscate the goods in question apart from proposing to impose penalty under Section 112(a) / 117 of the act.

The Order-in-Original No. 80781/2021 dated 08.03.2021 was passed whereby the impugned goods were confiscated and a penalty of Rs.1,00,000/- (Rupees One Lakh only) was imposed on the appellant. The said penalty was imposed on the ground that the appellant had violated the conditions/instructions contained in the Board Circular No. 56/2004 dated 18.10.2004 read with Public Notice No. 152/2004 dated 19.10.2004. The First Appellate Authority rejected the appeal of the appellant.

It was viewed that the pre-shipment inspection certificate, as required, is to be furnished at the time of clearance of the goods by an importer and any other person including a Steamer Agent has no locus to meet the above requirement. The responsibility was that of the importer, as prescribed, and in any case, the non-fulfilment of the above requirement would not ipso facto tantamount to declaring the goods as ‘prohibited’ under Section 111(d) of the act.

A Single member bench of Mr P Dinesha, member (judicial) has held that “the said Memorandum cannot be made applicable just because the Revenue woke up after more than 8 years to issue the Show Cause Notice.” 

The Tribunal set aside the impugned order and allowed the appeal. Shri L. Gokul Raj, Advocate appeared for the Appellant and Shri M. Ambe, Authorized Representative appeared for the Respondent.

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