IPR enforcement non-compliance defeats confiscation and penalties on imported goods; appellate relief to importer sustained

Confiscation of imported shoes and cosmetics, together with redetermination of value and penalties for alleged IPR infringement and prohibited import, was held unsustainable because the adjudication did not comply with the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. The Tribunal noted that the goods had already been ordered to be released in appeal and found no basis to interfere with that appellate order. As the proceedings were illegal and void for non-compliance with the governing IPR enforcement framework, the confiscation and consequential penalties could not stand. The revenue's challenge failed and the relief granted to the importer remained undisturbed.

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Issues: Whether the confiscation of imported shoes and cosmetics, the redetermination of value, and the penalties imposed for alleged infringement of intellectual property rights and prohibited import were sustainable.

Analysis: The goods had already been ordered to be released by the Commissioner (Appeals) after holding that the adjudication proceedings had not satisfied the requirements of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. The Tribunal noted that the High Court had directed the parties to pursue the pending appeal on merits and, on the record, found no basis to interfere with the appellate order. Since the proceedings were held to be illegal and void for non-compliance with the governing IPR enforcement framework, the confiscation and consequential penalties could not stand.

Conclusion: The departmental challenge failed and the appellate order setting aside the confiscation and penalties was sustained, in favour of the assessee.

Final Conclusion: The revenue's appeal was rejected, and the order granting relief to the importer remained undisturbed.

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