Importer was Duty-bound to inform Customs Dept that Imported Goods contains Counterfeit Goods: CESTAT upholds Penalty [Read Order]

The CESTAT, Delhi bench has while upholding the penalty order under Section 112 and 117 of the Customs Act, 1962, held that a regular importer has the duty to inform the department that the import contained counterfeit goods and such dubious conduct on the part of the appellant attracts penalty.

The Appellant, D J Import has assailed the penalty order of the department wherein it was alleged that the branded shoes imported by the appellant were actually ‘counterfeit goods’ and were in violation of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 .

The appellant contended that they had not filed any Bill of Entry and thus he is not the importer, as defined in Section 2 (26) of the Customs Act and thus, they cannot be said to have violated any provision of Section 111 of the Customs Act, and thus not reliable to any penalty under the provisions of Section 112, as he has not done or committed any act which would render the goods reliable to confiscation.

Mr. Anil Choudhary, Member (Judicial) observed that the conduct of the Appellant is also dubious, and not clean.

“In spite of having knowledge that the goods dispatched by the Shipper vide aforementioned Bill of Lading, being not as per order and containing counterfeit goods, being a regular importer it was his duty to cooperate with Customs and inform suo moto regarding the nature of the goods dispatched by the Shipper, and also of his intention of having abandoned the same goods. The goods were lying in the port after unloading by the shipping line for about three months, and neither the Appellant had filed any Bill of Entry nor had given any intimation of his decision to abandon the goods. It was only when physical examination was taken by opening the seal of container on 05.08.2014, the Customs department found regarding the misdeclaration, both as regards quantity and description. In the circumstances, I uphold the penalty under Section 117 of the Act. However, the quantum of penalty is reduced from Rs. 50,000/- to Rs. 20,000/-.”

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