TaxTMI 
TaxTMI 
Disclaimer:- This Draft Circular has been put up only to elicit public response. No final decision has been taken by Government/ Board. Government/ Board will proceed further in the matter only after due examination of the responses received
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....stoms (All) The Director General of Revenue Intelligence/ Central Excise Intelligence/Systems and Data Management/ Audit/ Export Promotion The Chief Departmental Representative (CESTAT), Delhi Sir, Subject: Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 - instructions for implementation -reg. Section 11 of the Customs Act,1962 provides that the Central Government, may, by issuance of notification in the official Gazette prohibit either absolutely or subject to such conditions as may be specified import or export of goods for the purposes specified in sub-section (2) of section 11 of the Customs Act, 1962. The Central Government may restrict or prohibit import and export of goods infringing trademarks, patents and copyrights under clause (n) of subsection (2) of section 11 of the Customs Act, 1962. Similarly, the Central Government may restrict import and export of goods for the purposes of prevention of the contravention of any law for the time being in force, under clause (u) of subsection (2) of section 11 of the Customs Act, 1962. 2. Prior to 8-5-2007, notification no. 1/64-Cus dated 18-1-64 prohibited ....
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.... of determination of infringement of above three intellectual property rights. The said Rules, inter alia, provide for (i) the filing of a notice by the right holder; (ii) registration of said notice by the Customs; (iii) Time limit for right holders to join proceedings; (iv) single point for registration of the notice filed by the right holder; (v) adequate protection to the rightful importer; (vi) adequate protection to the Customs for bonafide act; (vii) suo-moto action by the Customs in specified circumstances; (viii) disposal of the confiscated goods. (ix) no action against goods of non commercial nature contained in personal baggage or sent in small consignments intended for personal use of the importer. 5. The right holders would be required to give notice for registration in the manner detailed in para 10 of this circular , to any of the....
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....ce at Annexure-B and Annexure-C respectively. Necessary amendments may be made to suit the requirements, on case to case basis. 7. The surety and security shall be on consignment basis and shall be furnished along with the bond to be furnished consequent upon interdiction of consignment allegedly infringing rights of the right holders. Keeping in view the value of the goods and other incidental expenses, it has been decided that the Bond amount should be equal to 110% of the value of goods. However, the amount of security to be furnished along with the bond may be decided by the respective Commissioners in whose jurisdiction the bond is executed. The right holder may furnish security in the form of bank guarantee or fixed deposit. However, if the right holder fails to execute the consignment specific bond and furnish security within three days of intimation of the suspension of release of goods, the same must be released forthwith. 8. In case it is found at any stage that the right holder has furnished any wrong or false information, the registration accorded under Rule 4 of the said Rules may be cancell....
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....ity of declarations made therein. If required, cross-verification of particulars furnished can be carried out with the concerned authorities with whom the rights are originally registered in accordance with the parent enactments. The Commissioner may call for any additional information from the applicant(s). On being satisfied with the application, the bond (general) and the indemnity bond as required under the said Rules, the particulars would be required to be entered in the CBEC web-site duly furnishing the details. The system would then automatically generate a Unique Permanent Registration Number (UPRN), which will be communicated to the applicant for all future correspondence. Simultaneously, a formal communication to this effect shall be sent, within 24 hours, to the Risk Management Division (RMD), Mumbai and all other Custom Houses, who can access the details through the user names and pass-words given to them. On the contrary, if the Commissioner or his authorized officer of Customs has to reject the application leading to denial of protection, principles of natural justice may be followed. It may be noted that the temporary registration number granted by the system ....
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....or a minimum period of one year unless the right holder wants the same for a lesser period. It has been decided that the period of validity of the registration under the said Rules would be 5 years. The Commissioners, therefore, may keep a watch on the expiry of this period. However, once the period of validity of registration has lapsed and the right holder does not apply for renewal, the registration would automatically cease to have effect after the validity period. In case the right holder desires to renew the registration, he would be required to furnish fresh notice, pay the fees as applicable, execute general bond etc as done at the time of initial registration. 16. It may be appreciated that systematic enforcement of IPRs is new to Customs. Further, the nature and scope of implementation of IPR regime is different in EDI as well as non-EDI locations. Besides, RMS has not been implemented in all EDI locations. It may be noted that while national-level targeting of consignments can be handled by RMD, Mumbai on the basis of the information furnished by the applicants, and, under normal circumstances, consignments suspended by the na....
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....al Property rights. Thus it is important to make sure that the right holder participates in the Customs proceedings. In case the right holder abstains, the Customs have no obligation to continue with the detention and the goods shall be released forthwith, if otherwise in order. 20. Rule 8 enables examination of goods and drawl of samples on the request of right holders or importers. The regular procedure for sampling may be followed. Representative samples must be kept in the safe custody of Customs till the proceedings are concluded. The expenses involved in sampling, testing of samples etc have to borne by the right holders. 21. For smooth implementation of the IPR regime, it is desirable that IPR Cells may be constituted in each Custom House. The IPR Cell may be vested with the responsibility of verifying the applications, completing web-enabled registration formalities and making correspondence with the Risk Management Division and other Customs formations. Further, any import involving suspected infringement of IPRs may have to be invariably handled by the IPR Cell. Any instance of suo-moto interdiction of the import consignments by the Cust....
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....ging the IPR held by me/us, depending on the information furnished by me/us and on the basis of the declarations made by the Importers in the course of importation, I/we the Right Holder hereby agree to furnish such bond, security and surety, as may be prescribed by the Proper Officer, in terms of Rule 5 (a) of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 and also agree to indemnify the Customs as detailed under Rule 5(b) of the ibid Rules. NOW, IT IS HEREBY AGREED AND DECLARED that - (i) The Right holder shall execute proper consignment specific bond(s) with the proper officer of customs at the port/airport/land customs station, where suspect goods have been interdicted and clearances of the same have to be suspended, along with such amount of surety and security, as may be determined at that time in terms of Rule 5(a) of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 within three days from the date of interdiction of the import consignments failing which the consignment shall be released. (ii....
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....ght Holder at ………….. in the presence of :- 1……………………….. 2………………………. xxxxxxxxxxxxxxxx Accepted For and on behalf of the President of India (Signature of the Proper Officer with Official Stamp and Seal ) Note: * Mandatory in case any surety has been prescribed. Strike off, if irrelevant. ANNEXURE-B BOND EXECUTED IN PURSUANCE OF REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS WITH INDIAN CUSTOMS See Rule 5(a) of Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 [To be executed by the Right Holder(s)] (Bond with Provision for Security Deposit and Surety) KNOW ALL MEN BY THESE PRESENTS THAT I/we ………………………………………….. residing at …………………………… hereinafter referred to as "R....
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....derstood general functioning of Customs, shall share the trends and information with Customs on an on-going basis, about suspected imports of infringing goods violating the IPR laws, as may be required to interdict consignments and to suspend the clearance. (iii) The Right Holder undertakes to protect the importer, consignee and the owner of the goods and the competent authoritiesagainst all liabilities that are incidental and ancillary to the act of suspension of clearance of allegedly infringing goods, in case it is established that the suspension is vexatious. (iv) The Right Holder shall bear all the costs towards sampling, destruction, demurrage and detention charges incurred till the time of destruction or disposal of such infringing goods, upon being confirmed. (v) The Right Holder shall join the proceedings as per the time lines prescribed in terms of the ibid Rules, failing which, they agree, to not to object to the release of the goods. (vi) This bond shall remain in force for a period of five years from the date of completion of registration and the liability of the Right holder shall be in respect of all such interdicted consignments, whose clearance has....
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...._____(indicate the authority with whom it was registered)___________ , _______(Place)________ and have decided to seek protection from the Indian Customs of the registered rights against the imported infringing goods that are violating of the Intellectual Property Laws in India. 2. And whereas, on our application, the Indian Customs have obliged to suspend the clearance of the suspected infringing goods as set out in the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007, we hereby undertake in terms of Rule 5(b) of the said Rules to indemnify the Union of India, represented by Commissioner of Customs ________(specific formation)_______ or any of his authorized Officer(s) from any damages incidental and ancillary to such suspension of clearance and any further action preventing distribution and circulation of infringing goods, on our behalf, after importation. 3. Further, we indemnify the Union of India, represented by Commissioner of Customs ________(specific formation)_______ or any of his authorized Officer(s) from any future liabilities, in case any third party other than ______(Name & Address) ___________....