Jas International vs Nhava Sheva

[Arising out of Order-in-Appeal No: 68/2004 (JNCH) dated 30th June 2004 passed by the Commissioner of Customs (Appeals), Mumbai  II.]

For approval and signature:

Honble Shri Ramesh Nair, Member (Judicial) Honble Shri C J Mathew, Member (Technical)

1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? : No 2. Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? : No 3. Whether Their Lordships wish to see the fair copy of the Order? : Seen 4. Whether Order is to be circulated to the Departmental authorities? : Yes

Jas International

Appellant Vs

Commissioner of Customs

Nhava Sheva

Respondent

Appearance:

Shri Anil Balani, Advocate for the appellant

Shri M.K. Mall, Asstt. Commissioner (AR) for the respondent

CORAM:

Honble Shri Ramesh Nair, Member (Judicial) Honble Shri C J Mathew, Member (Technical)

Date of hearing: 10/09/2015 Date of decision: 10/09/2015

ORDER NO: ____________________________

Per: C J Mathew:

M/s Jas International, Ludhiana is in appeal before us against order-in-appeal no. 68/2004 (JNCH) dated 30th June 2004 of Commissioner of Customs (Appeals), Mumbai II which modified the order of the primary adjudicating authority, the Additional Commissioner of Customs, CFS, Mulund by reversing the enhancements in value for assessment under Customs Act, 1962 but upheld the confiscation of goods and imposition of penalty.

2. The appellant imported parts of air conditioners with a declared value of ` 7,56,340/- vide Bill of Entry no. 101/2.4.2004. Upon inspection and comparison with contemporary imports, the value was enhanced to ` 18,57,145/-. Some of these goods, with revised value of ` 5,36,769/- were found to lack country of origin marks on them or on the packages in which these were imported and, thereby, violative of section 117 of Trade and Merchandise Marks Act, 1958. Accordingly, they were held to have been imported in contravention of section 11 of Customs Act, 1962 and, therefore, subject to action under section 111 (d) and (m) of Customs Act, 1962. Penalty of `3,00,000/- was imposed on the importer. The goods were allowed to be redeemed subject to payment of fine of ` 5,00,000/-. The impugned order of first appellate authority set aside the enhancement, reduced the penalty to ` 50,000/- and the redemption fine to ` 1,00,000/-. Hence this appeal by importer on the ground that packing list did indicate the origin of the goods and that curable defects should not have been visited with penal action.

3. We have heard both sides and find that the issue lies within the narrow compass of propriety of invoking of section 11 of Customs Act, 1962. This provision 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.

4. The Trade and Merchandise Marks Act, 1958 is a consumer protection law that applies to specified imported commodities as prescribed by notification issued under section 117. To give effect to such prescriptions, such goods that are required to, but do not conform, are prohibited for import through the notification under section 11.

5. We find 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 was 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.

6. We, therefore, are constrained to observe that 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.

7. In view of the above, we set aside the impugned order and allow the appeal.

(Pronounced in Court) (Ramesh Nair) Member (Judicial) (C J Mathew) Member (Technical)

*/as

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