Sheikh & Mahajan LLP Vs Commissioner of Customs (Preventive) (CESTAT Delhi)
Facts- The appellant imported the goods which were alleged to be mis-declared. The appellant accepted that due to mistake of the Chinese supplier the same was mis-declared in terms of value and quantity. On suggestion of the appellant, a joint market survey was conducted along with the appellant and based on the market value the assessable value was determined through deductive method. The appeal was filed on following grounds-
- Goods of the brands not registered with customs are not prohibited and hence seizure, confiscation, penalty and duty are illegal,
- Confiscation of goods u/s 111(d) & (m) illegal as there is no mis-declaration,
- Rejection of value u/s 14 is illegal,
- Re-determination of AV u/s 14(1) is illegal,
- Confiscation of goods on higher assessed value is illegal,
- Absolute confiscation of goods having men mark; horse mark and three strips is illegal,
- Imposition of redemption fine and penalty u/s 114A illegal,
- Imposition of penalty u/s 112 illegal,
- Impugned OIO and OIA liable to be set aside since the time-limit prescribed in IPR rules not followed.
Conclusion- As far as the goods infringing the IPR (counterfeit goods) are concerned, once they are found to have violated the Rights of the rights holder, as per Rule 6, they become prohibited goods under section 11 of the Customs Act, 1962. Section 111(d) squarely applies to prohibited goods which are imported. As confirmed by assessee, since the goods were not even ordered by them and were sent by mistake, confiscation of goods u/s 111(l) is correct and proper.
So long as the IPR of another person are violated, it does not matter even if they contain some unregistered trade marks. We find in favour of the Revenue on this count.
Imposition of penalty under both the section 112 and 114 not sustainable. Penalty imposed u/s 114A set aside.
FULL TEXT OF THE CESTAT DELHI ORDER
This appeal is filed by the appellant assailing the order-in-appeal 1 dated June 14, 2019 passed by the Commissioner of Customs (Appeals), New Delhi rejecting the appellan’s appeal and upholding the order-in-original dated June 14, 2018 passed by the Additional Commissioner of Customs (Preventive), New Delhi.
2. The appellant filed Bill of Entry No. 4927337 dated 24.01.2018 through its Custom House Agent2 M/s Ananya Exim. Receiving information about mis-declaration of the goods in terms of quantity and value in this consignment, the goods were examined and then seized by the Customs officers on 7.2.2018. The Panchnama states that “as the goods were found to be mis-declared in terms of quantity and value, imported goods were seized under Section 110 of the Customs Act, 1962” vide seizure Memo dated 7.2.2018 on reasonable belief the same were liable for confiscation under provisions of the Customs Act, 1962. The consignment was handed over to the Central Warehousing Corporation3 Patparganj which was the custodian of the imported goods. On 12.2.2018, the appellant requested that the goods may be warehoused which was permitted by the Department and thereafter re-examined in detail. As recorded in the Panchnama drawn on 27.2.2018, during examination of the goods, it was also noticed that the imported goods had mentioned brands such as AIR, MAX, logo of Adidas, Puma, Nike, etc. The details of the shoes found as recorded in the Panchnama are as follows:
