Custom, Excise & Service Tax Tribunal
M/S. Navshiv Retail Pvt. Ltd vs Commissioner Of Customs on 17 April, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Customs Appeal No. 59511 of 2013-Cus [SM]
[Arising out of Order-In-Appeal No. CC(A)CUS/I & G/256/2013 dated 15.05.2013 passed by Commissioner of Customs (Appeals), New Delhi]
For approval and signature:
Honble Ms. Archana Wadhwa, Member (Judicial)
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 the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
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
M/s. Navshiv Retail Pvt. Ltd. Appellants
Vs.
Commissioner of Customs, Respondent
New Delhi Appearance:
Shri Abhishek Kishore, Advocate for the Appellants Shri Jayant Shah, AR for the Respondent Date of Hearing /decision: 19.02.2014 Date of Hearing /decision: 17.04.2014 ORDER NO. FO/ 51629 /2014- (SM) Per Archana Wadhwa:
After hearing both the sides duly represented by Shri Abhishek Kishore, learned Advocate appearing for the Appellants and Shri Jayant Shah, AR appearing for the Revenue, I find that the appellant filed bill of entry dated 9.7.2012 for clearance of branded mobile phones (mobiado). During examination, it was found that International Mobile Equipment Identity (hereinafter referred to as IMEI) number of phones were allocated to other brands like Nokia and Samsung and did not pertain to the declared brand. Accordingly, the original adjudicating authority directed the appellants to re-export the goods on payment of Redemption fine of Rs. 3 lakh and penalty of Rs. One lakh. On appeal, Commissioner (Appeals) reduced the redemption fine to Rs.1.45 lakhs and penalty to Rs.80,000/-.
2. For better appreciation, I reproduce the relevant paragraph from the order of Commissioner (Appeals).
4. I have examined the issue and I find that as per the Foreign Trade Policy 2009-2014, import of Mobile handsets without International Mobile Equipment Identity (IMEI) is prohibited. It is true that the handsets imported by the appellant bearing the brand name (Mobiado) do have the identity numbers but on examination and verification it has been noticed that these IMEI numbers are allocated to another brand owner. Therefore the IMEI numbers of the subject goods are not licit hence can be considered as unavailable. Furthermore the matter is also fraught with security implications. Therefore the original authority has correctly disallowed home consumption of these goods and allowed re-export of the subject goods. This order of the original authority is legally correct and it is upheld except that Redemption Fine of Rs. 1.45 Lakh and Penalty of 0.80 Lakh appears correct and appropriate as per facts and circumstance of the case. The appellant during the course of hearing had requested for drawl and retention of sample of the products considering the roadmap of litigation in this case. This request being reasonable is allowed.
3. I find that in terms of notification No. 14/2009- 2014 dated 14.10.04 issued by the Ministry of Commerce and Industries, Government of India, the requirement of having IMEI number on the Mobile equipment has been made essential. For better appreciation, this notification is being reproduced below:-
Subject: Important policy of Mobile Handsets.
S.O. (E)-In exercise of powers conferred by Section 5, read with Section 3(2) OF THE FOREIGN Trade (Development and Regulation) Act, 1992, also read with paragraph 2.1 of the foreign Trade Policy-2009-2014, the Central Government hereby amends Schedule-l of the ITC (HS) Classification of Export and Import Items as under:
(i) Import of Mobile Handsets (classified under ITC (HS) Code 1857) without international Mobile Equipment Identity (IMEI) No. or with all Zeroes IMEI is prohibited with immediate effect.
(ii) Import of CDMA mobile phones (classified under ITC (HS) code 8517) without Electronic Serial Number (ESN/Mobile Equipment Identifier (MEID) or with all Zeroes as ESN/MEID is prohibited with immediate effect. As is seen from above, the notification debars import of mobile handsets when IMEI numbers. Admittedly in the present case, the IMEI numbers were there on the imported Mobile phones. The Revenues case is that said IMEI number belonged to Nokia and Samsung and as such, cannot be considered as valid IMEI numbers.
4. On the other hand, appellants contention is that said brand name belongs to one M/s. Bonac Innovation Corporation, a company incorporated under the laws of Canada, for the distributorship and retail of mobile hand sets under the name and style of mobiado; that mobiado is an international luxury brand which is retailed in various countries across different parts of the world. The Mobiado brand embellishes the design of existing mobile handsets manufactured by Original Equipment Manufacturers (OEM) by using cutting edge engineering. There is no change whatsoever to mobile handsets manufactured by the OEM except for embellishment of the casting of the phone. It is there contention that all the world renowned designer of mobile handset, like Vertu, Tag heur, Porshe are also using the mobile handsets manufactured by original equipment manufacturer (OEM), like Nokia and Samsung. Even the mobile handsets of Vertu, Tag Heur etc. have IMEI numbers allotted to their respective original equipment manufacturer like Nokia, Samsung etc. The appellant vide its letter dated 30.11.2012, brought the aforesaid facts to the notice of the customs authority and also filed the said letter along with copy of the photos of the mobile handsets of Vertu, showing its IMEI number on screen, which pertains to other brand Nokia.
5. As such, the short question required to be decided in the present appeal is as to whether the Customs authorities were justified in confiscating the goods and allow the re-export on payment of redemption fine and imposition of penalties on the ground that IMEI numbers available in respect of phones belonging to original equipment manufacturer like Nokia and Samsung. As is seen from the notification reproduced above, the only requirement under the law is that mobile hand sets should be carrying the IMEI numbers which admittedly the present consignment was having. As per the appellants, Bonac Company is only de-designing and embellishing the casing of existing hand sets which are manufactured by the original equipment manufacturers like Nokia and Samsung, by using cutting edge engineering / technology. In such a case, the IMEI number has to be belonging to the manufacturer of mobile phones. When viewed from the above angle, I find force in the appellants contention that customs authorities are not proper officer to examine the issue as to whether the IMEI numbers stand validly given on hand sets or as to whether the brand name owner was the actual owner of the said IMEI numbers. If the IMEI numbers allocated to Nokia and Samsung are being used by another company, M/s. Nokia and M/s. Samsung are aggrieved party, and would have definitely taken action against M/s. Bonac. In the absence of any indication to that effect and in the absence of admitted position of mobile hand sets carrying of IMEI numbers, I find no justification for confiscation of the goods or for imposition of penalties. Accordingly, impugned orders are set aside and appeal allowed with consequential relief to the appellants.
(Dictated & pronounced in the open Court )
( Archana Wadhwa ) Member(Judicial)
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