Archana Wadhwa - (1.) 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. 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 Revenue's case is that said IMEI number belonged to Nokia and Samsung and as such, cannot be considered as valid IMEI numbers.
(3.) 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 Heuer, Porsche are also using the mobile handsets manufactured by original equipment manufacturer (OEM), like Nokia and Samsung. Even the mobile handsets of Vertu, Tag Heuer 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.;