Madhav KRG HRC Pvt Ltd Vs Commissioner of Customs (CESTAT Chandigarh)
The appeal challenged the Order-in-Appeal dated 29.04.2026, whereby the Commissioner (Appeals) upheld the Order-in-Original confiscating imported Heavy Melting Scrap, permitting its redemption only for re-export on payment of redemption fine of ₹6,00,000, and imposing penalties of ₹3,00,000 each under Sections 112 and 114AA of the Customs Act, 1962.
The appellant had imported Heavy Melting Scrap under Bill of Entry dated 16.08.2025. During scrutiny, the Department found that the Pre-Shipment Inspection Certificate (PSIC) had been issued by M/s Asia Inspection Agency Ltd showing the place of inspection as Port Louis, Mauritius. According to DGFT Public Notice No. 48/2015-20 dated 05.01.2023 and paragraph 2.52(e) of the Handbook of Procedure, 2023, Mauritius did not fall within the notified area of operation of that inspection agency. The Department therefore treated the PSIC as invalid, concluded that the appellant had contravened Sections 46(4) and 46(4A) of the Customs Act, 1962 read with the relevant DGFT provisions, treated the imported goods as prohibited goods under Section 2(33), seized them under Section 110, and confiscated them under Section 111(d).
The appellant submitted that the PSIC had been issued by a DGFT-authorised Pre-Shipment Inspection Agency and that the imported scrap was found free from war material and other objectionable material. It contended that although the agency was not authorised for Mauritius during the relevant period, it remained an empanelled DGFT agency and no proceedings had been initiated against it for issuing the certificate. The appellant also submitted that the PSIC had been uploaded on the DGFT portal and accepted by DGFT. It argued that subsequent inspection in India found no objectionable material and therefore there was no violation of Customs law warranting confiscation or re-export. The appellant further submitted that the goods were at best restricted goods subject to regulatory compliance and not prohibited goods, and that penalties under Sections 112 and 114AA were unsustainable because there was no fault on its part.
