2013 (12) TMI 1245 - AT - Customs

Partial clearance of goods - Imposition of redemption fine and penalty - Violation Intellectual Property Rights of Hindustan Unilever - Held that - impugned cosmetics other than DOVE and AXE have been found fit for release by the Assistant Drugs Controller and its restriction of import through particular ports is in view of non-availability of testing facilities for drugs and cosmetics. As such, the violation in regard to these cosmetics imported through Tuticorin Port, which in any case have been subsequently tested and found to be fit for releasing, is a technical violation - the reduction in fine and penalty ordered by the lower appellate authority requires no interference - the lower appellate authority cannot be faulted with taking a similar decision in the present case and allowing re-export of the impugned goods namely, DOVE and AXE import of which has been made contravening Intellectual Property Rights - Decided against Revenue.

Summary

Issues: Violation of Intellectual Property Rights, Clearance of imported goods, Reduction in fine and penalty, Re-export of goods, Amendment validity

Violation of Intellectual Property Rights:
The case involved the import of cosmetics through Tuticorin Port, including products bearing the trademarks "DOVE" and "AXE." The original authority allowed clearance of all cosmetics except DOVE and AXE, confiscating them for violating the Intellectual Property Rights of Hindustan Unilever. The lower appellate authority reduced the redemption fine and penalty, allowing re-export of DOVE and AXE. The Department appealed against this decision, arguing that the reduction in fine and penalty was inadequate.

Clearance of Imported Goods:
The lower appellate authority reduced the redemption fine and penalty imposed on the imported cosmetics, except for DOVE and AXE. The goods, other than DOVE and AXE, were found fit for release by the Assistant Drugs Controller, despite being imported through Tuticorin Port, which was not initially an authorized port. The violation was considered technical due to subsequent testing and compliance with regulations after Tuticorin Port was declared an authorized port.

Reduction in Fine and Penalty:
The Department contended that the reduction in fine and penalty was disproportionate to the value of the impugned goods. However, the appellate authority's decision was upheld based on the technical nature of the violation and the subsequent compliance with regulations post-import.

Re-export of Goods:
The lower appellate authority allowed the re-export of DOVE and AXE, citing a High Court decision that permitted the re-export of goods contravening Intellectual Property Rights. The decision was supported by the argument that the goods were imported in violation of Intellectual Property Rights and were thus eligible for re-export.

Amendment Validity:
The Department raised concerns about the validity of an amendment made on 9-4-2010, arguing that it was only a draft Government Order. However, the judgment did not find this argument compelling and dismissed the Department's appeal, upholding the lower appellate authority's decision regarding the reduction in fine, penalty, and re-export of the goods.