By TIOL News Service

MUMBAI, MAR 22, 2016: THE appellant imported 'parts of air conditioners' with a declared value of Rs.7,56,340/-. Upon inspection and comparison with contemporary imports, the value was enhanced to Rs. 18,57,145/-. Some of these goods, with revised value of Rs.5,36,769/- were found to lack country of origin marks on them or on the packages in which these were imported and, thereby, allegedly violated section 117 of Trade and Merchandise Marks Act, 1958.

The Customs authorities held that these goods were imported in contravention of section 11 of CA, 1962 and, therefore, subject to action u/s.s111(d) and 111(m) of Customs Act, 1962. Penalty of Rs.3,00,000/- was imposed on the importer. The goods were allowed to be redeemed subject to payment of fine of Rs.5,00,000/-.

The Commissioner (A) set aside the enhancement of value, reduced the penalty to Rs.50,000/- and the redemption fine to Rs.1,00,000/-.

The importer is before the CESTAT and submits that packing list did indicate the origin of the goods and that curable defects should not have been visited with penal action.

After considering the submissions, the Bench observed -

+ Section 11 in the statute enables the Central Government to ban the import and export of goods for reasons enumerated in the said provision. Among these are prohibitions under other laws. Admittedly, the prohibition of goods contravening section 117 of Trade and Merchandise Marks Act, 1958 finds a place in notification no. 1/64-Cus dated 18th January 1964 issued under section 11 of the Customs Act, 1962.

+ Both the 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. We find that Section 117 of the old law was replaced by section 139 in the new Act.

The order was set aside and the appeal was allowed.

(See 2016-TIOL-681-CESTAT-MUM)