2017 (1) TMI 1474 - AT - Customs

Misdeclaration of imported goods - goods declared as unbranded motorcycle parts, whereas on examination goods were found to be Roll On brand motorcycle chains and STEBEL brand horns - grant of permission to re-export of the goods to the supplier - Held that - the wrong supply has been made of goods bearing counterfeit brand name. This involves not only mis-declaration of imported goods, but also infringement of Intellectual Property Rights - since the exporter is willing to take back the wrongly supplied goods, the same should be permitted - a penalty of ₹ 1 lakh imposed on the importer u/s 112 of the CA, 1962 - appeal allowed in part.

Summary

Issues:
1. Misdeclaration of imported goods
2. Confiscation of counterfeit goods
3. Re-export of wrongly supplied goods
4. Penalty under Section 112 of the Customs Act, 1962

Analysis:

Misdeclaration of Imported Goods:
The appeal was against an order passed by the Commissioner (Appeals) regarding the misdeclaration of imported goods. The appellant had declared import of unbranded motorcycle parts, but Customs Officers found branded goods upon examination. The authorities seized the goods under Section 110 of the Customs Act, 1962, and later ordered confiscation of the imported counterfeit goods. The Commissioner (Appeals) upheld the confiscation of counterfeit goods and re-determination of value for other items. The Tribunal found the misdeclaration of goods established, leading to confiscation under Sections 111(m) and 111(l) of the Customs Act, 1962. The Tribunal upheld the findings of the authorities below, indicating no interference was warranted.

Confiscation of Counterfeit Goods:
The imported goods, specifically the "Roll On" brand motorcycle chains, were found to be counterfeit. The Tribunal emphasized that misdeclaration of goods and infringement of Intellectual Property Rights were established. Despite the willingness of the exporter to take back the wrongly supplied goods, the Tribunal ordered the confiscation of the counterfeit goods. A penalty of ?1 lakh was imposed on the importer under Section 112 of the Customs Act, 1962. This decision was based on the recognition of the seriousness of misdeclaration and Intellectual Property Rights infringement.

Re-export of Wrongly Supplied Goods:
The appellant sought permission for the re-export of the wrongly supplied goods, citing correspondence with the supplier admitting the error and offering to bear shipping expenses. The Tribunal acknowledged similar cases where re-export was permitted for wrongly supplied goods. However, in this instance involving counterfeit goods, the Tribunal allowed re-export due to the exporter's willingness to take back the goods. Despite permitting re-export, a penalty of ?1 lakh was imposed on the importer as a consequence of the misdeclaration and infringement of Intellectual Property Rights.

Penalty under Section 112 of the Customs Act, 1962:
The Tribunal imposed a penalty of ?1 lakh on the importer under Section 112 of the Customs Act, 1962. This penalty was justified based on the established misdeclaration of goods, the confiscation of counterfeit items, and the infringement of Intellectual Property Rights. The penalty served as a consequence for the importer's actions, despite the permission granted for the re-export of the wrongly supplied goods.

In conclusion, the Tribunal's judgment addressed the issues of misdeclaration of imported goods, confiscation of counterfeit goods, re-export of wrongly supplied goods, and the imposition of a penalty under Section 112 of the Customs Act, 1962. The decision highlighted the seriousness of misdeclaration and Intellectual Property Rights infringement, leading to the confiscation of counterfeit goods and the imposition of a penalty on the importer.