Imported shoes with UCB logo and ROCK brand absolutely confiscated for mis-declaration and trademark infringement under Section 111(d)

CESTAT New Delhi upheld absolute confiscation of imported shoes bearing UCB logo and ROCK brand name due to mis-declaration and trademark infringement. The appellant failed to declare branded goods in import documents and lacked authorization to use the trademarks. Benetton India Ltd was established as rightful holder of UCB logo for footwear. UCB-branded shoes were deemed prohibited counterfeit goods subject to absolute confiscation under Section 111(d). ROCK-branded shoes, being non-prohibited, were subject to redemption fine under Section 125. Penalties under Sections 112(a)(i) and 114AA were upheld. IPR Rules time limits were held directory rather than mandatory. Appeal dismissed.

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Issues Involved:
1. Confiscation of imported goods for trademark infringement.
2. Penalty imposition under Sections 112(a)(i), 112(a)(ii), and 114AA of the Customs Act, 1962.
3. Compliance with Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.

Summary:

1. Confiscation of Imported Goods for Trademark Infringement:
The appellant imported goods declared as "Man PU Canvas Shoes" but upon examination, 7512 pairs bore the "United Colors of Benetton (UCB)" logo, and 7200 pairs bore the "ROCK" title. The right holder, Benetton India Pvt. Ltd. (BIL), confirmed the goods as counterfeit, infringing their trademark. The Tribunal upheld that the goods bearing the UCB logo were counterfeit and thus categorized as "prohibited goods" under the Customs Act, 1962, leading to their absolute confiscation under Section 111(d). The goods with the "ROCK" title were also confiscated under Section 111(m) due to mis-declaration.

2. Penalty Imposition under Sections 112(a)(i), 112(a)(ii), and 114AA:
The Commissioner (Appeals) reduced the penalty under Section 112(a)(i) from Rs. 7 lakhs to Rs. 4 lakhs and set aside the penalty under Section 114AA, which was deemed excessive and primarily applicable to paper transactions without physical movement of goods. The Tribunal found the penalty imposed under Section 112(a)(i) and (ii) justified and upheld the Commissioner's decision.

3. Compliance with Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007:
The appellant argued non-compliance with the IPR Rules, particularly the time limits for suspension of clearance and informing the importer. The Tribunal found that the procedural lapses did not prejudice the appellant, as the substantive provisions of the Customs Act were not complied with. The Tribunal held that the IPR Rules' timelines are directory, not mandatory, and the primary compliance with the Customs Act is essential.

Conclusion:
The Tribunal upheld the absolute confiscation of the goods bearing the UCB logo as "prohibited goods" and the confiscation of the "ROCK" branded goods under Section 111(m). The penalties imposed under Section 112(a)(i) and (ii) were also upheld. The appeal was dismissed, affirming the impugned order.

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