PIMS Registration Timeline Directory, Not Mandatory: CESTAT Quashes Confiscation for Delayed PIMS Compliance [Read Order]
The Tribunal held that the PIMS registration timeline is directory not mandatory, since registration was obtained before clearance, the lapse was procedural. Thus, the confiscation and penalty were set aside and the appeal was allowed.
![PIMS Registration Timeline Directory, Not Mandatory: CESTAT Quashes Confiscation for Delayed PIMS Compliance [Read Order]](https://images.taxscan.in/h-upload/2025/12/17/2112741-pims-registration-timeline-directory-not-mandatory-cestat-quashes-confiscation-delayed-pims-compliance-taxscan.webp "PIMS Registration Timeline Directory, Not Mandatory: CESTAT Quashes Confiscation for Delayed PIMS Compliance [Read Order]")
The Principal Bench of Customs, Excise & Service Tax Appellate Tribunal(CESTAT), New Delhi, held that the timeline prescribed under the Paper Import Monitoring System (PIMS) was directory and not mandatory and ruled that obtaining PIMS registration after arrival of goods but before clearance amounts to a mere procedural lapse. Accordingly, the confiscation order and...
The Principal Bench of Customs, Excise & Service Tax Appellate Tribunal(CESTAT), New Delhi, held that the timeline prescribed under the Paper Import Monitoring System (PIMS) was directory and not mandatory and ruled that obtaining PIMS registration after arrival of goods but before clearance amounts to a mere procedural lapse. Accordingly, the confiscation order and penalty were quashed.
The Appellant, M/s Greenlam Industries Ltd., filed an appeal arising from Order-in-Appeal No. 10(RLM)CUS/JPR/2024 dated 21.06.2024 of the Commissioner (Appeals), Jaipur.
The Appellant imported "Base Paper for waxing, coating and impregnation & Uncoated Base Paper" under CTH 48119099 through various Bills of Entry, including No. 2710094/02.10.2022, No. 2708916/02.10.2022, No. 2718679/03.10.2022, and No. 2718224/03.10.2022. Thhad introduced the Paper Import Monitoring System (PIMS) via Notification No. 11/2015-2020 dated 25.05.2022, effective from 01.10.2022, making import of such goods subject to compulsory registration.
PIMS required importers to obtain an automatic Registration Number by applying not earlier than the 75th day and not later than the 5th day before the expected date of arrival of the import consignment. The goods arrived at ICD Kathuwas on 05.10.2022 and 06.10.2022. However, the Appellant obtained PIMS registration on 07.10.2022 and 10.10.2022, respectively, which was after the arrival of the consignments and thus beyond the prescribed timeline.
The Out of Charge Officer raised a query regarding the PIMS registration timeline. The Appellant subsequently uploaded the PIMS certificates. The Adjudicating Authority, vide Order-in-Original No. 45/2022-ADC-Customs dated 21.10.2022, ordered confiscation of the goods under Section 111(d) of the Customs Act, 1962, with an option to redeem them upon payment of a redemption fine of Rs. 3,00,000/-, and imposed a penalty of Rs. 50,000/- under Section 112(a)(i) of the Customs Act, 1962. Aggrieved, the Appellant filed the present appeal before the Customs, Excise & Service Tax Appellate Tribunal.
The Section 111(d) of the Customs Act, 1962 explained that: Confiscation of improperly imported goods, etc.
“The following goods brought from a place outside India shall be liable to confiscation:-
(d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force;”
The Counsel for the Appellant, R.G. Choudhary, Consultant, submitted that non-submission of the PIMS certificate within the prescribed timeline was merely a procedural lapse, as the certificate was subsequently submitted before clearance of goods. The delay occurred due to late receipt of documents from the shipper, which was beyond the appellant's control.
Further, the Counsel stated that the word "can" used in the notification should be interpreted as directory, not mandatory, and thus non-compliance with the timeline should not render the goods liable for confiscation under Section 111(d) of the Customs Act, 1962.
On the other hand, the Counsel for the Respondent, Anand Narayan, Authorised Representative, reiterated the findings of the authorities below and contended that the appellant violated the conditions prescribed under Notification No. 11/2015-2020 dated 25.05.2022 by obtaining PIMS registration after the arrival of goods instead of between 75 days to 5 days prior to arrival.
Further, the Counsel also stated that this constituted a breach of Section 46(4) of the Customs Act, 1962, rendering the goods liable for confiscation under Section 111(d) and the importer liable for penalty under Section 112(a)(i). The respondent prayed for dismissal of the appeal.
The Section 46(4) of the Customs Act, 1962 explained that: Entry of goods on importation.
“The importer while presenting a bill of entry shall at the foot thereof make and subscribe to a declaration as to the truth of the contents of such bill of entry and shall, in support of such declaration, produce to the proper officer the invoice, if any, [and such other documents relating to the imported goods as may be prescribed] [Substituted 'relating to the imported goods' by Finance Act, 2018 (Act No. 13 of 2018), dated 29.3.2018.]”
The Tribunal consisted of Judicial Member, Binu Tamta, heard and reviewed the matter filed by the Appellant.
The Tribunal, after considering the submissions made, held that the term "can" in Notification No. 11/2015-2020 must be construed as "may," making the PIMS timeline directory rather than mandatory. It distinguished between substantive and procedural conditions, classifying the PIMS timeline as procedural. Non-adherence to such procedural requirements did not render goods liable for confiscation, especially when the core compliance objective was fulfilled.
The Tribunal also stated that although PIMS certificates were submitted after filing Bills of Entry, they were uploaded before goods clearance, thereby fulfilling the notification's purpose of monitoring paper imports. The delay was minuscule, and the appellant's explanation for the late receipt of documents from the shipper was justified, indicating no malafide intent.
Further, the Tribunal relied on Siddharth Enterprises Vs. Nodal Officers 2019(29) GSTL 664 (Guj), Commissioner of Central Excise, Madras versus Home Ashok Leyland Ltd, 2007 (210) ELT 178 and Mangalore Chemicals & Fertilisers Ltd versus Deputy Commissioner 1991 (55) ELT 437 (SC) applying the principle that procedural conditions should not lead to harsh consequences when substantive compliance is achieved.
Thus, the Tribunal set aside the impugned order and allowed the appeal filed by the appellant.
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