CESTAT Delhi- Delay in uploading the PIMS certificate did not warrant confiscation or penalties

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 06.11.2025

CESTAT Delhi- Delay in uploading the PIMS certificate did not warrant confiscation or penalties

In the realm of international trade, compliance with import regulations is a critical aspect that businesses must navigate carefully. A recent case involving M/s Greenlam Industries Ltd. sheds light on the importance of adhering to procedural requirements while also highlighting the distinction between mandatory and directory provisions in import policies. ​

The Case Overview

M/s Greenlam Industries Ltd., a company based in Rajasthan, filed multiple Bills of Entry (B/E) for importing Base Paper under the Customs Tariff Heading (CTH) 48119099. ​ These imports were subject to the Paper Import Monitoring System (PIMS), a policy introduced by the Central Government under Notification No. ​ 11/2015-2020 dated 25.05.2022. ​ The PIMS mandates importers to register their consignments online and obtain a Registration Number between 75 days to 5 days prior to the expected arrival of the goods.

In this case, the goods arrived at ICD Kathuwas on 5th and 6th October 2022, but the importer registered under PIMS only on 7th and 10th October 2022, which was beyond the prescribed timeline. ​ Consequently, the customs authorities deemed the import non-compliant and ordered the confiscation of goods under Section 111(d) of the Customs Act, 1962, along with a penalty under Section 112(a)(i). ​

The Appeal and Tribunal’s Decision ​

The appellant challenged the confiscation and penalty, arguing that the delay in PIMS registration was due to late receipt of documents from the shipper. ​ The case eventually reached the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), where Hon’ble Member (Judicial) Ms. Binu Tamta presided.

After reviewing the case, the Tribunal observed that the timeline for PIMS registration, as outlined in the notification, used the term “can,” which implies a directory rather than mandatory provision. ​ The Tribunal emphasized that the delay in uploading the PIMS certificate was a procedural lapse and did not substantially affect the compliance with the import policy. ​ The certificate was submitted before the clearance of goods, fulfilling the purpose of the import condition. ​

The Tribunal referred to precedents, including the Supreme Court’s judgment in Mangalore Chemicals & Fertilisers Ltd vs. Deputy Commissioner, which distinguished between substantive and procedural conditions. It concluded that minor procedural lapses should not lead to severe penalties or confiscation, especially when the substantive requirements are met. ​

Key Takeaways for Importers

1. Understand Import Regulations Thoroughly: Importers must familiarize themselves with the specific requirements of notifications and policies, such as PIMS, to avoid procedural lapses. ​
2. Timely Compliance is Crucial: While procedural lapses may not always lead to severe penalties, it is essential to adhere to timelines to avoid unnecessary legal complications. ​
3. Procedural vs. Substant ​ive Compliance: The case highlights the importance of distinguishing between mandatory and directory provisions in regulations. ​ While substantive compliance is critical, minor procedural lapses may not necessarily result in severe consequences. ​
4. Documentation and Communication: Ensure timely receipt of necessary documents from shippers and maintain clear communication to avoid delays in compliance.

Conclusion

The Greenlam Industries case serves as a reminder of the complexities involved in import regulations and the importance of understanding the nuances of compliance. ​ While the Tribunal’s decision to set aside the confiscation and penalty provides relief to the appellant, it underscores the need for importers to be vigilant and proactive in meeting regulatory requirements. By doing so, businesses can avoid legal disputes and ensure smooth operations in the global trade landscape.

Source: CESTAT Delhi

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