Penalty u/s 112 Unsustainable in Absence of Evidence Against Valid Pre Shipment Certificate: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Kolkata held that the penalty imposed under Section 112 of the Customs Act, 1962, was set aside as the Tribunal found that in the absence of corroboratory evidence against the valid Pre-Shipment Certificate the same could not be sustained.

Allowing the appeal the tribunal held that no offence warranting penalty under Section 112 was made out and accordingly set aside the penalty with consequential relief.

The appellant N.K. Hand & Sons (Garments) imported readymade garments in June 2013 through the Petrapole Land Customs Station. The goods were cleared by the Customs authorities after assessment on the basis of the Pre-Shipment Certificate issued by the Bangladesh University of Textiles.

However, the Show Cause Notice dated 30th January 2016 was issued stating that the institution was not an accredited authority and hence the certificate was invalid. The Department proposed the confiscation of the goods and the imposition of the penalty and the adjudicating authority imposed the penalty of ₹2,48,000 under Section 112 which was upheld by the Commissioner (Appeals).

The appellant contended that the Bangladesh University of Textiles is a government recognized institution authorized to issue certificates relating to AZO and hazardous dyes. Reliance was placed on a communication from the Deputy High Commission of Bangladesh confirming the authority of the institution.

Further, it was argued that the Customs authorities had accepted the certificate at the time of import and allowed clearance and therefore the subsequent challenge to its validity was unjustified.

The Revenue department however, reiterated the observations made in the impugned order and stated that the certificate was not issued by an accredited body.

The Tribunal comprising K.Anpazhakan (Technical Member) held that the goods were cleared after due verification by the Customs authorities and no objection was raised when the assessment was made.

Further, the Tribunal held that the appellant has produced evidence in the form of official communication which proves the status of the Bangladesh University of Textiles as a government authorized body and that the Revenue authorities failed to produce evidence on the record to contradict the certificate in question, which goes to prove the genuineness of the certificate.

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