2023 (7) TMI 782 - HC - Customs

Rejection of clearance of the goods imported - denial on the ground of a trade mark dispute between the petitioners and respondent no. 8 is sub-judice - HELD THAT - Rule 3 provides for Notice by the right holder to the Customs Authorities in relation to goods infringing Intellectual property rights and requesting for suspension of clearance of goods suspected to be infringing intellectual property rights. Rule 4 provides for registration of such notice and Rule 6 provides for prohibition for import of goods infringing intellectual property rights. Thus, the 2007 Rules provide for a complete scheme in relation to the goods infringing Intellectual property rights falling under the definition of Intellectual Property as defined in Rule 2(a). It is only after the registration of notice by the Commissioner, the import of infringing goods into India is deemed to be prohibited within the meaning of Section 11 of the C.E. Act as ordained by Rule 6. Having noted the statutory scheme as contained in the Rules, in the present case, the official respondents have not brought to our notice any steps taken by the official respondents under the 2007 Rules so as to register respondent no. 8 s complaint and notify the same as per the specific requirement of the Rules. It is thus clear that without any of the conditions in the Rule being satisfied, the Customs department has withheld clearance of the goods of the petitioner. For such reason, action on the part of the Customs officials to withhold clearance of the petitioners goods would be required to be held to be ex-facie illegal. Reliance as placed by learned counsel for the petitioners on the decision of the Division Bench of this Court in NBU BEARINGS PVT. LTD. ANR. VERSUS UNION OF INDIA ORS. 2021 (3) TMI 544 - BOMBAY HIGH COURT is quite apposite. In such decision, the Court has considered the provisions of 2007 Rules as also the provisions of Trade Marks Act and Copyright Act in dealing with similar situation wherein the petitioner in such case had a copyright dispute with respondent no. 6. On such dispute, the Court observed that the petitioners therein and respondent no. 6 were litigating against each other to establish their respective right, title and entitlement to the ownership of the copyright in question. Although various proceedings were pending in the Court, neither of the parties were in a position to obtain any order from the Civil Court and produce the same before the customs authorities to take benefit of the statutory provisions - It was also observed that in the absence of a Court order as contemplated under sub-section (4) of Section 53 of the Copyright Act, which was a relevant Act as pressed into service in the said proceedings, the customs authorities were not justified to withhold the consignment imported by the petitioners, on a complaint of respondent no. 6 therein, unless respondent no. 6 obtains appropriate interim orders from the Civil Court declaring that respondent no. 6 was the owner of the mark in question and places the same for consideration of the customs authorities. In such circumstances, the Court had permitted release of the goods in question - the view taken by the Division Bench in NBU Bearing Pvt. Ltd. is squarely applicable in the facts of the present case. There is no warrant for the customs authorities in not permitting release of the goods in question in the absence of any right in respect of the mark in question having crystallized in favour of respondent no. 8 at the time petitioner sought clearance of the goods subject matter of bill of lading - Petition disposed off.

Summary

Issues Involved:
1. Legality of seizing imported goods under a Bill of Lading.
2. Jurisdiction and authority of Customs Authorities in trademark disputes.
3. Applicability of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.

Summary:

1. Legality of Seizing Imported Goods:
The petitioners sought a writ of certiorari to quash the seizure of goods imported under Bill of Lading EXSH2310608 by the Commissioner of Customs, Nhava Sheva-V. They also requested a writ of mandamus directing the respondents to release the seized goods. The petitioners argued that the seizure was based on a sub-judice trademark dispute with respondent no. 8, which did not justify the detention of the goods.

2. Jurisdiction and Authority of Customs Authorities:
The petitioners contended that the Customs Authorities lacked jurisdiction to detain the goods solely due to an ongoing trademark dispute. They emphasized that no court order restrained them from using the trademark "INGCO." The petitioners referenced a Division Bench decision in NBU Bearings Pvt. Ltd. vs. Union of India, asserting that Customs Authorities cannot withhold goods without a court order validating the trademark claim.

3. Applicability of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007:
The court examined the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007, particularly Rules 6 and 7, which allow Customs Authorities to suspend clearance of goods suspected of infringing intellectual property rights. The court noted that the Customs Authorities had not followed the required procedures under these rules, such as registering the complaint by respondent no. 8. Consequently, the court found the Customs' action to be "ex-facie illegal."

Conclusion:
The court concluded that without any orders favoring respondent no. 8 regarding the trademark, the Customs Authorities could not legally prevent the clearance of the goods. The court ordered the release of the goods under Bill of Lading EXSH2310608 and allowed the petition, keeping all contentions open in the pending civil suits. The petition was disposed of without costs.