1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 01.12.2011 CORAM THE HONOURABLE MR.JUSTICE V.RAMASUBRAMANIAN W.P(MD)No.8937 of 2011 and M.P(MD)No.1 of 2011 M/s.Landom Distributors Pte Ltd, 151, Pasir Panjang Road, #03-04 Pasir Panjang Distripark, Singapore – 118 480. Represented by its Authorised Signatory and Director Lam Sing Hoo. ... Petitioner Versus 1. The Commissioner of Customs, Office of the Commissioner of Customs, Custom House, New Harbour Estate, Tuticorin – 628 001. 2. The Deputy Commissioner of Customs, Office of the Commissioner of Customs, Custom House, New Harbour Estate, Tuticorin – 628 001. ... Respondents PRAYER: Writ petition is filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, to call for the records connected with impugned communication in C.No.VIII/48/593/2010-IG dated 30.06.2011, issued by the second respondent, quash the same and consequently direct the respondents to permit re-shipment /re-export of the cargo back to the petitioner comprised in a 40 Feet Container, consisting of 1467 Cartons of deodorants of various brands, covered under Bill of Lading No.APLU 057378084 dated 21.01.2011 issued by the shipper APL Co.PTE. LTD, Singapore, in the control and custody of respondents herein. For Petitioner : Mr.N.Balaji For Respondents : Mr.R.Aravindan Senior Standing Counsel for Customs O R D E R The petitioner has come up with the above Writ Petition, challenging an order issued by the second respondent, rejecting the request of the petitioner for re-export of certain imported goods, on the ground that those goods were actually seized for violation of the provisions of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. https://hcservices.ecourts.gov.in/hcservices/ 2 2. Heard Mr.N.Balaji, learned Counsel for the petitioner and Mr.R.Aravindan, learned Senior Standing Counsel for the respondents. 3. The petitioner is a Company incorporated at Singapore. One of its customers in India by name M/s. Amit Impex, Pune placed an order upon the petitioner for a consignment of Deodorants of different brands packed in 1467 cartons. The goods were despatched under a Bill of Lading dated 21.01.2011. 4. The goods arrived at the customs section of the respondents, somewhere in February-March 2011. But the importer namely M/s.Amit Impex refused to clear the goods. They did not even file a bill of entry. Therefore, the petitioner issued two communications dated 19.04.2011 and 05.05.2011, seeking the permission of the first respondent to re-export the goods back to Singapore. The petitioner claimed to exercise their right to recall the goods as un paid vendor. 5. But by a letter dated 30.06.2011, the second respondent informed the petitioner that the goods had been seized for having been imported in contravention of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. Aggrieved by the said order, the petitioner is before this Court. 6. In Union of India Vs. Sampat Raj Dugar 1992 (58) E.L.T. 163 (SC), the Supreme Court held that when the importer refuses to pay the price of the goods and abandons them, the title in the goods remains with the owner and that they are entitled to seek re-export. But the second respondent has distinguished the said decision, in his impugned communication, by stating that the goods in question have been seized by the Directorate of Revenue Intelligence, Tuticorin and that therefore they are “offended goods” within the meaning of the Customs Act, 1962. The second respondent has also relied upon the provisions of the Intellectual Property Right (Imported Goods) Enforcement Rules, 2007. 7. Insofar as the first ground on which the second respondent rejected the request of the petitioner is concerned, it is seen from an Order – In – Original bearing No.12043 of 2010, dated 17.05.2010 passed by the Commissioner of Customs (Seaport-Import) that following the decision of the Supreme Court in Sampat Raj Dugar, the Commissioner of customs has also held that whenever an importer does not pay for the goods and abandoned them, the exporter continues to be the owner. The said decision rendered in the case of a Company by name M/s.Bhavna Pte Ltd, Singapore, according to the Central Government Standing Counsel, has not been appealed against by the Department. Therefore, I do not see how the case of the petitioner can be differentiated from that of M/s.Bhavna Pte Ltd, Singapore. 8. Insofar as the second ground of rejection is concerned, it is seen that in exercise of the powers conferred by the Customs Act 1962, the Government issued the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. The Rules prescribe a https://hcservices.ecourts.gov.in/hcservices/ 3 detailed procedure for the prohibition of import of goods infringing Intellectual Property Rights and for the suspension of disposal of such infringing goods. Under the aforesaid Rules, a right holder should first obtain Registration in terms of Rule 4. If a person holding Intellectual Property Rights gets Registration in terms of Rule 4, his goods are protected from infringement, through a detailed procedure, prescribed by Rules 6 & 7. While Rule 6 prohibits import of such goods, Rule 7 stipulates the procedure to be followed for the suspension of clearance of the imported goods. Rule 7 reads as follows:- “Rule 7. Suspension of clearance of imported goods.- (1)(a) Where the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, based on the notice given by the right holder has a reason to believe that the imported goods are suspected to be goods infringing intellectual property rights, he shall suspend the clearance of the goods. (b) The Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may, on his own initiative, suspend the clearance of goods, in respect of which he has prima facie evidence or reasonable grounds to believe that the imported goods are goods infringing intellectual property rights. (2) The Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall immediately inform the importer and the right holder or their respective authorised representatives through a letter issued by speed post or through electronic mode of the suspension of clearance of the goods and shall state the reasons for such suspension. (3) Where clearance of the goods suspected to be infringing intellectual property has been suspended and the right holder or his authorised representative does not join the proceedings within a period of ten working days from the date of suspension of clearance leading to a decision on the merits of the case, the goods shall be released provided that all other conditions of import of such goods under the Customs Act, 1962, have been complied with: Provided that the above time-limit of ten working days may be extended by another ten days in appropriate cases by the Commissioner or an officer authorized by him in this behalf. (4) Where the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, has https://hcservices.ecourts.gov.in/hcservices/ 4 suspended clearance of goods on his own initiative and right holder does not give notice Rule 3 of the Rules or does not fulfill the obligation under Rule 5, within five days from the date of suspension of clearance, the goods shall be released provided that all other conditions of import of such goods under the Customs Act, 1962, have been complied with. (5) Where the clearance of goods has been suspended, customs may, where it acts on its own initiative, seek from the right holder any information or assistance, including technical expertise and facilities for the purpose of determining whether the suspect goods are counterfeit or pirated or otherwise infringe an intellectual property right. (6) Where the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, has suspended clearance of goods on his own initiative and right holder has given notice under Rule 3 of the Rules and fulfilled the obligations under Rule 5, but, the right holder or his authorised representative does not join the proceedings within a period of ten working days from the date of suspension of clearance leading to a decision on the merits of the case, the goods shall be released provided that all other conditions of their import under the Customs Act, 1962, have been complied with: Provided that the above time-limit of ten working days may be extended by another ten working days in appropriate cases by the Commissioner or an officer authorised by him in this behalf. (7) In the case of perishable goods suspected of infringing intellectual property rights, the period of suspension of release shall be three working days which may be extended by another four days subject to the satisfaction of the Commissioner or the officer authorized by him in this behalf that such extension shall not affect the goods. (8) Notwithstanding anything contained in these Rules, in the case of suspension of clearance of perishable goods on the basis of notice of the right holder or his authorized representative, the right holder or his authorized representative shall join the proceedings as required under these Rules within three working days or the extended period as provided in sub-Rule (7) and in case of suspension of clearance of perishable goods by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, on his own initiative, the right holder shall give notice, execute a bond and join the proceedings as required under these Rules within three working days or the extended https://hcservices.ecourts.gov.in/hcservices/ 5 period as provided in sub-Rule (7), as the case may be, failing which the goods shall be released. (9) If within ten working days or the extended period under sub-Rule (6), as the case may be, and within three working days or the extended period as provided in sub-Rule (7) of this Rule in the case of perishable goods, the right- holder or his authorized representative joins the proceedings, the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, having reasons to believe that the goods are goods infringing intellectual property rights and liable to confiscation under Section 111 (d) of the Customs Act, may seize the same under Section 110 of the Customs Act.” 9. The impugned order shows that the goods were seized on 06.04.2011. Neither the impugned order nor the counter filed by the respondents gives any indication about the compliance with the procedure stipulated under Rule 7. They do not also show whether the right holder has registration or not. Therefore, the impugned order is liable to be set aside. 10. Accordingly, the Writ Petition is allowed and the impugned order is set aside. The respondents are directed to permit the petitioner to re-export the goods, within a period of four weeks from the date of receipt of a copy of this order. Consequently, connected Miscellaneous Petition is closed. No costs. Sd/- Assistant Registrar (Crl.Side) /True Copy/ Sub Assistant Registrar To 1. The Commissioner of Customs, Office of the Commissioner of Customs, Custom House, New Harbour Estate, Tuticorin – 628 001. 2. The Deputy Commissioner of Customs, Office of the Commissioner of Customs, Custom House, New Harbour Estate, Tuticorin – 628 001. +1 CC to Mr.R.Aravindan, Advocate (SR.No.42582) +1 CC to Mr.M.Ramasamy, Advocate (SR.No.42386) W.P(MD)No.8937 of 2011 01.12.2011 ps NSV/7.12.11/5P/5C https://hcservices.ecourts.gov.in/hcservices/