no, you are correct. But section 27, under penalties conveniently ignores that sub-section.
So he knows the work infringes, but he imports it only for his own personal or private use. He has no intent to distribute, so he takes advantage of the loophole in the penalties section. Section 27gives him a loophole to import AS LONG AS IT IS FOR HIS OWN PRIVATE OR DOMESTIC USE. That is the loophole we are talking about. There is no penalty mentioned for such use, EVEN IF HE KNOWS THE WORK TO BE INFRINGING.
Smoke and mirrors, pal.
At the end of the day, you may claim that there is no legal precedent to clearly define piracy as illegal, but that just means that there is also no legal precedent to define it as legal. You are bending the law to suit yourself, and all you are saying is : "I will break the law, until I get caught."