2016 (3) TMI 1033 - AT - Customs

Invokation of Section 11 of the Customs Act, 1962 - Prohibition on goods imported through Notification No. 1/64-Cus dated 18th January 1964 under section 11 - Import of parts of air conditioners but were found to lack country of origin marks, therefore, violation of section 117 of Trade and Merchandise Marks Act, 1958 - Held that - the two lower authorities have not ascertained and rendered a finding on the applicability of the prohibition to the goods under import. That there has been no such effort is apparent from the reference made to a prohibition in the omnibus notification of 1964 without verifying its continued existence in 2004. The Act relied upon by the lower authorities were replaced by the Trade Marks Act, 1999; no doubt existing notifications continued to exist under the corresponding provisions of the new Act but Section 117 of the old law was replaced by section 139 in the new Act. The two lower authorities have failed to take note of the altered provisions of the statute and appear to have taken recourse to a provision in notification issued under section 11 of Customs Act, 1962 without examining substantive compliance on the part of the importer or whether the exclusionary clauses of the primary notification were available to the importer. Therefore, Section 11 ibid can not be invoked. Decided in favour of appellant

Summary

Issues:
1. Enhancement of value for assessment under Customs Act, 1962
2. Confiscation of goods and imposition of penalty
3. Violation of section 117 of Trade and Merchandise Marks Act, 1958
4. Applicability of section 11 of Customs Act, 1962
5. Compliance with consumer protection laws regarding imported commodities

Analysis:
1. The case involved an appeal by M/s Jas International against an order modifying the value of imported air conditioner parts and upholding confiscation and penalty. The declared value was enhanced upon inspection, leading to issues regarding the correctness of the valuation. The primary adjudicating authority reversed the enhancements but upheld confiscation and penalty. The appellant contested the penalty and confiscation, arguing that the goods' packing list indicated the origin, and curable defects should not attract penal action.

2. The central issue revolved around the propriety of invoking section 11 of the Customs Act, 1962. This provision allows the government to prohibit imports for various reasons, including violations of other laws. The case specifically dealt with contravention of section 117 of the Trade and Merchandise Marks Act, 1958, which was prohibited under a notification issued under section 11 of the Customs Act, 1962.

3. The Trade and Merchandise Marks Act, 1958, serves as a consumer protection law for specified imported goods. The prohibition of non-conforming goods under this Act is enforced through notifications issued under section 117, thereby preventing their importation.

4. The appellate tribunal found that the lower authorities failed to determine the applicability of the prohibition to the imported goods. They relied on outdated provisions and notifications without verifying their continued relevance. The tribunal highlighted the replacement of section 117 of the old law with section 139 in the new Trade Marks Act, 1999, indicating the need for proper assessment under the current legal framework.

5. Ultimately, the tribunal set aside the impugned order and allowed the appeal, emphasizing the importance of substantive compliance with updated statutory provisions and exclusionary clauses in notifications under the Customs Act, 1962. The judgment underscored the necessity of a thorough examination of legal compliance and the applicability of consumer protection laws to imported commodities for fair adjudication.