2017 (1) TMI 1349 - AT - Customs

Import of prohibited goods - branded shoes and toys - eye liners/eye brow pencils - confiscation of goods with imposition of fine and penalty - Held that - goods are alleged to have been imported in violation of section 111(d), (i) and (m) of Customs Act, 1962 and prohibited for import under section 11 of Customs Act, 1962. But the fact remains that the proceedings in this case was declared illegal, null and void by the first appellate authority finding that the adjudication proceedings have not fulfilled the requirements of Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. Confiscation and penalties were vacated by Commissioner (Appeals) and the goods were allowed to be released - no reason found to interfere to the impugned order passed by the Commissioner (Appeals) - appeal dismissed - decided against Revenue.

Summary

Issues:
Classification of goods under Customs Tariff Heading, Misdeclaration of goods, Confiscation and redemption of goods, Intellectual Property Rights violation, Appeal against Commissioner (Appeals) order, Review petition and Contempt petition before High Court, Compliance with Customs Act provisions, Disposal of goods, Stay application.

Classification of Goods under Customs Tariff Heading:
The case involved the classification of goods imported by the appellant under different Customs Tariff Headings (CTH). The lower adjudicating authority found discrepancies in the self-assessment of goods by the appellant, particularly concerning eye liners and shoes. The authority reclassified the goods and imposed duties based on the Maximum Retail Price (MRP) and Customs Valuation Rules, 2007. The appellant's declared value was rejected due to misdeclaration, leading to confiscation and redemption of certain goods under the Customs Act, 1962.

Misdeclaration of Goods:
The appellant faced allegations of misdeclaration regarding the origin and branding of imported goods. The lower adjudicating authority determined that a portion of the imported eye liners was misbranded and of German origin instead of Chinese as declared. Similarly, the importer admitted that the shoes imported were duplicates and not original, leading to proceedings under Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. Different notifications were applied based on the brand involved, resulting in confiscation and redemption of goods along with penalties imposed under the Customs Act.

Confiscation and Redemption of Goods:
The Commissioner (Appeals) set aside the lower authority's order, leading to an appeal by the department. The High Court intervened in the matter, directing the release of goods covered under specific Bills of Entry. The appellate tribunal upheld the Commissioner's decision, vacating confiscation and penalties imposed on the goods, allowing their release. The proceedings were declared illegal and null by the first appellate authority, emphasizing non-compliance with Intellectual Property Rights Enforcement Rules.

Intellectual Property Rights Violation:
The case involved violations of Intellectual Property Rights (IPR) concerning the importation of counterfeit goods bearing brand names like Adidas and Nike. The proceedings under IPR Enforcement Rules led to confiscation, redemption, and penalties imposed on the imported goods. Different legal provisions and notifications were applied based on the brand involved, with specific actions taken against goods bearing prohibited brands.

Appeal Against Commissioner (Appeals) Order and High Court Directions:
The department's appeal against the Commissioner (Appeals) order was dismissed by the appellate tribunal. The High Court's directions emphasized the need for statutory appeal proceedings before the tribunal, allowing both parties to participate and resolve the matter on its merits. The court highlighted the importance of exhausting appeal remedies before seeking judicial intervention.

Review Petition and Compliance with Customs Act Provisions:
The High Court disposed of the review petition and contempt petition, emphasizing the need for compliance with the Customs Act provisions and statutory appeal processes. The court directed the parties to participate in the appeal proceedings before the tribunal, ensuring a fair and expeditious resolution of the matter.

Disposal of Goods and Stay Application:
The appellate tribunal upheld the Commissioner (Appeals) decision to release the goods, dismissing the revenue's appeal and the miscellaneous application for stay. The tribunal found no reason to interfere with the lower authority's order, emphasizing the legality of the proceedings and the compliance with relevant Customs Act provisions.

This detailed analysis of the judgment highlights the complex legal issues involved in the case, including classification disputes, misdeclaration of goods, IPR violations, appellate proceedings, High Court directions, and compliance with statutory provisions, ultimately leading to the dismissal of the revenue's appeal and the release of the imported goods.