2025-VIL-1127-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs – Penalty for submitting fabricated Pre-Shipment Inspection Certificate (PSIC) – Appellant, a high sea seller of steel scrap from Mauritius, procured and submitted a Pre-Shipment Inspection Certificate from an agency that was not authorized by the DGFT for that country - Whether submitting a non-genuine and seemingly fabricated PSIC is a substantive illegality warranting a penalty under Section 112(a) of the Customs Act, or merely a curable procedural infraction if the goods are subsequently found to be clean upon inspection. – HELD - The submission of a fabricated PSIC is not a mere technical or venal lapse but a grave illegality that cannot be cured by a subsequent clean physical inspection. The statutory requirement for a valid PSIC from an authorized agency is a critical safeguard against the import of hazardous materials and threats to life. Where a statute prescribes an act to be done in a particular manner, it must be done in that manner alone - Deploying illegal means, such as using a certificate whose contents are not credible, nullifies the entire purpose of the procedure. While the absence of prohibited material in the consignment may be a mitigating factor for determining the quantum of penalty, it does not erase the initial violation of producing a non-genuine document. The appellant, having procured the defective certificate, engaged in a blameworthy conduct rendering the goods liable for confiscation - The imposition of penalty is upheld as the violation is established, however, the penalty amount is reduced as it was found to be excessive - The appeal is disposed of - Customs Act 1962 – Section 112 – General Clauses Act 1897 – Section 3(42) – Definition of “Person” – Corporate Liability – The appellant, a limited company, contended that a penalty could not be imposed upon it under Section 112 of the Customs Act, 1962, as the provision refers to a "person," which they argued implies only a natural individual and not a corporate entity - Whether a company or a corporate body is included within the meaning of "person" for the purpose of levying a penalty under Section 112 of the Customs Act, 1962 – HELD - The word "person" is not defined in the Customs Act, 1962. In such cases, the definition provided in the General Clauses Act, 1897, applies. Section 3(42) of the General Clauses Act explicitly provides an inclusive definition, stating that a "person" shall include any company or association or body of individuals, whether incorporated or not. Therefore, a company is legally considered a "person" and is subject to penalties under Section 112 of the Customs Act.
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