TaxTMI 
TaxTMI 
2024 (12) TMI 177
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....of entry No. 3870698 dated 04.11.2017. Upon examination by the Customs officials, it is found that the goods bearing trade mark of brand name NIKE, ADIDAS, PUMA, REEBOK, ASICS and VANS. The goods were seized on the ground of misdeclaration and alleged infringement of Intellectual Property Rights (IPR). Show cause notice proposing confiscation and imposing penalties was issued. The Adjudicating Authority confirmed the proposal in the show cause notice leading to absolute confiscation and imposition of penalties under Section 112(a) and 114AA of the Customs Act, 1962. Therefore the present appeals filed by the appellants. 3. Shri Naresh Satwani, learned Consultant appearing on behalf of the appellants submits that the goods were absolutely confiscated on the charge of misdeclaration of goods as well as value of the goods. As regards the misdeclaration of the goods, there is charge of the department that the goods are counterfeit bearing the brand name of right holder therefore, there is violation of Intellectual Property Rights Rules, 2007. In this regard he submits that to hold the counterfeit goods as prohibited, it is necessary that the original brand name owner must participat....
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....or the Customs Act, 1962 (52 of 1962), and in supersession of the notification No. 49/2007-Customs (N.T.), of the Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Customs, dated the 8th May, 2007 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 333(E), dated the 8th May, 2007, except as respects things done or omitted to be done before such supersession, the Central Government, being satisfied that it is necessary in the public interest so to do, for the purposes specified in clauses (n) and (u) of sub-section (2) of that section, hereby prohibits the import of the following goods intended for sale or use in India, subject to following conditions and procedures as specified in the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007, namely :- (i) goods having applied thereto a false trade mark as specified in section 102 of the Trade Marks Act, 1999 (47 of 1999); (ii) goods having applied there to a false trade description within the meaning of clause (i) of sub-section (1) of section 2 of the Trade Marks Act, 1999 (47 of 1999), otherwise than in ....
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.... is provided that if any imported goods having false trade description within the meaning of Trade Mark Act, 1999 are prohibited goods in terms of clause (n) and (u) of sub-Section 2 of Section 11 of Customs Act, 1962. 6. The learned Consultant has vehemently argued that to hold the goods as prohibited, particularly with reference to false brand names, he referred to Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 which is reproduced below:- Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 In exercise of the powers conferred by sub-section (1) of section 156 of the Customs Act, 1962 (52 of 1962), read with clauses (n) and (u) of sub-section (2) of section 11 of the said Act, the Central Government hereby makes the following rules, namely :- 1. Short title, commencement and application. - (i) These may be called the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. (ii) They shall come into force on the date of their publication in the Official Gazette. (iii) They shall apply to imported goods. 2. Definitions. - (a) "goods infringing intellectual....
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....toms authority when his intellectual property ceases to be valid or if he ceases to be the owner of such intellectual property right. 4. Registration of notice by the Commissioner. - (1) Within 30 working days from the date of receipt of the notice under sub-rule (1) of Rule 3, or from the date of expiry of the extended time as contemplated in sub-rule (4) of Rule 3, as the case may be, the Commissioner shall notify the applicant whether the notice has been registered or rejected. (2) In a case where the notice has been registered, the Commissioner shall indicate the validity period of the registration during which assistance by Customs shall be rendered. The minimum validity period shall be one year unless the noticee or right holder requests for a shorter period for customs assistance or action. (3) The Commissioner granting the registration of the notice under sub-rule (2) shall inform, immediately through a letter by speed post or through electronic mode, all Custom offices covered by the notice of the details of the notice. 5. Conditions for registration. - The grant of registration under rule 4 shall be subject to following conditions, name....
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....ecision on the merits of the case, the goods shall be released provided that all other conditions of import of such goods under the Customs Act, 1962, have been complied with : Provided that the above time-limit of ten working days may be extended by another ten days in appropriate cases by the Commissioner or an officer authorized by him in this behalf. (4) Where the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, has suspended clearance of goods on his own initiative and right holder does not give notice under rule 3 of the Rules or does not fulfill the obligation under Rule 5, within five days from the date of suspension of clearance, the goods shall be released provided that all other conditions of import of such goods under the Customs Act, 1962, have been complied with. (5) Where the clearance of goods has been suspended, customs may, where it acts on its own initiative, seek from the right holder any information or assistance, including technical expertise and facilities for the purpose of determining whether the suspect goods are counterfeit or pirated or otherwise infringe an intellectual property right. ....
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.... goods are goods infringing intellectual property rights and liable to confiscation under Section 111(d) of the Customs Act, may seize the same under Section 110 of the Customs Act. 8. Examination of goods by right holder. - The Commissioner or the officer duly authorized in this behalf shall allow a right holder and the importer or their duly authorized representatives to examine the goods, the clearance of which has been suspended, and may provide representative samples for examination, testing and analysis to assist in determining whether the goods are pirated, counterfeit or otherwise infringe an intellectual property right, without prejudice to the protection of confidential information. 9. Supply of information to the right holder. - At the request of the right holder, the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall inform the name and address of the importer and without prejudice to the protection of confidential information the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may also provide additional relevant information relating to the consignment which has been ....
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....mples of goods infringing intellectual property rights prior to their destruction or disposal and provide the same to the right holder or importer if such samples are needed as evidence in pending or future litigations. 12. Exclusion of baggage and De-minimis Imports. - Goods of a non-commercial nature contained in personal baggage or sent in small consignments intended for personal use of the importer are not subject to the above Rules. 13. Protection of action taken under the Rules. - Customs officers when acting in good faith and having followed the procedures set out in these Rules shall not be liable for : (a) any failure to detect goods infringing intellectual property rights, (b) the inadvertent release of such goods, and (c) any other action in respect of such goods." From the above Rules, it is mandatory on the part of the right holder i.e. brand name owners to follow the procedure as prescribed in the above Rules and only thereafter the goods can be held as prohibited goods. However, as per Rule 7 (3) of the Rules, it is provided that if the right holder or his authorised representative does not join the proceedings within a....
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.... accepted the value. Regarding the Shoes, the Shri Nagaraj (Importer) was summoned and he has given a voluntary statement admitting that the shoes imported by him were duplicate and not original. The impugned order has stated that M/s. Adidas have joined the Customs proceedings under provisions of Intellectual Property Rights (Imported goods) Enforcement Rules, 2007 and have submitted a bond for Rs. 4,62,303/- and a bank guarantee for Rs. 1,15,576/-. It is seen that M/s. Nike did not join the proceedings nor has fulfilled the conditions of registration as provided under Rule 5 of the IPR Enforcement Rules, 2007. The LAA has held that in the case of Adidas brand, there will be a concurrent application of Notification No. 47/2007-Cus. (N.T.,) dated 8-5-2007 and Notification No. 51/2010-Cus. (N.T.) since they have joined the proceedings and in the case of Nike brand the Notification No. 51/2010-Cus. (N.T.), dated 30-6-2010 shall apply independently. Based on that the LAA has held that all the shoes bearing Adidas brand and Nike Brand totally valued at Rs. 13,52,785/- are prohibited and has confiscated them under Section 111(d)(111 (i) and 111(m) of the Customs Act, 19962. Reg....
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....ordered accordingly. No costs. The connected miscellaneous petition is closed." 7. Against this order, department preferred Review Petition No. 58/2015 and the respondent herein also preferred a Contempt Petition No. 844/2015 in the same matter. Vide a common order dated 8-10-2015, both the petitions were disposed by the Hon'ble High Court inter alia with the following directions :- "13. As regards the review, though there is no apparent error on record since the order does not suffer from any infirmity, however, taking note of the fact that it has been passed solely with the observation that there was no appeal preferred by the department on the date of the order under review and there by the impugned order has become final, which as rightly contended by the learned counsel for the customs department, is virtually misconceived and cannot be sustained. Further, it is to be noted that even the statute has prescribed time limit for preferring the appeal, which admittedly, is available to the customs department till 17-2-2015, however, the order under review has been passed as if the order impugned in the writ petition has become final since there was no appeal by th....