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May 17, 2021

Court Case Bulletin (CCB): Without Court Order, Customs Cannot Indefinitely Suspend Clearance Even If The Copyright Has Been Registered With Customs

Author: Siddharth Varshney

In the matter of NBU Bearings Ltd & Anr. v. Union of India & Ors. [WP(L) No. 3371 of 2021], a Divison Bench [Ujjal Bhuyan, Milind N. Jadhav, JJ.] of the High Court of Bombay by its judgment dated March 12, 2021 held that, in the absence of any interim order from the competent court, the custom authorities cannot suspend clearance to detain and hold goods beyond the initial period of 14 days.  

Section 53(4) of the Copyright Act, 1957 provides – “The Customs Officer shall release the goods, and they shall not longer be treated as prohibited goods, if the person who gave notice under sub-section (1) does not produce any order from a court having jurisdiction as to the temporary or permanent disposal of such goods within fourteen days from the date of their detention.” (emphasis supplied). Rule 7 (1) of Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007Where the…Customs…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.”(emphasis supplied). The underlying question in this case is seen to be whether the latter statutory provision can prevail over the former.

The importer-Petitioner imported bearings under the brand ‘TR’. The complainant had raised a system alert with the custom authorities alleging that the imported goods are suspected to be infringing its copyright. Upon the custom authorities suspending clearance, the importer submitted registration of the trademark ‘TR’ in Class 7.

The importer contended that the custom authorities have no authority to suspend clearance of the imported goods beyond the initial period, in absence of the complainant submitting an order of a competent Court. The custom authorities, however, contended that the complainant has been granted registration of the ‘TR’ artistic work under the Customs Act thereby constituting the complainant as the ‘right holder’ and that therefore they have followed due process.

The Court ruled in favour of the Importer and held that “In the absence of any interim order…from the civil court from being placed on record … it will therefore not be appropriate for …to withhold / detain the consignments imported …beyond the prescribed period of 14 days…Merely because the owner of the work / mark deposits the requisite amount of security with the customs department, the customs officer cannot treat the imported goods as prohibited…”. 

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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