Circular No. 10 /2011- Customs
F. No. 305/1/2008-FTT
Government
of India
Ministry
of Finance
Department of Revenue
Central
Board of Excise & Customs
(International
Customs Division)
Dated the, 24th February, 2011
To
All Chief Commissioners of Customs/ Customs (Prev.),
All Chief Commissioners of Central
Excise,
All Chief Commissioners of Central
Excise & Customs,
All Director
Generals under CBEC,
The
Chief Departmental Representative (CESTAT), Delhi.
Sir/Madam,
Subject:
Intellectual Property Rights (Imported
Goods) Enforcement Rules, 2007 -instructions
for implementation -reg.
Attention is invited to Board"s
Circular No 41/2007-Customs dated
29-10-2007
on the above subject. In the said Circular, it was provided that the right
holders may
furnish a General Bond without security to the Commissioner of
Customs prior to the grant of
registration, undertaking to execute
consignment specific Bonds
with the jurisdictional Commissioner of Customs at the port of interdiction within three days from the date of
interdiction of any allegedly infringing goods. This
arrangement was prescribed considering the fact that at the time of
registration but
prior to importation, it may be difficult to ascertain and fix the Bond amount
corresponding to the value of suspected infringing goods that are to be
imported. Further, this would lock in right
holders" money in the form of security.
2. However,
representations have been received from the trade requesting for a centralized
bond valid for all ports, as execution of bond at the port of interdiction
within three days of interdiction of allegedly infringing goods is stated to be
a cumbersome
process. The opinion of Law Ministry on legal implications of a single Bond across different customs
locations was sought. The Ministry of Law and Justice clarified as under:-
"The language of the Bond clearly
indicates that the Bond is executed in favour of President of India and the same is
enforceable by any authorised Commissioner (Customs). If the right holder is allowed to
furnish one time Bond along with security at the time of Registration and all
the ports to have access to this centralized account, there appears to be no legal
objection for introduction of the same as Bond to be executed is in favour of President of India and not in favour of Commissioner (Customs)."
3.
The issue has been considered in
the Board. Currently, the right holders are required
to give a notice for registration in the manner detailed in the Circular No. 41/2007-Customs dated 29.10.2007 to
the Commissioner of Customs at any one of the ports where allegedly
infringing goods are likely to be imported. The right holder can mention the details of
other ports where he suspects that allegedly infringing goods may be imported
and where he desires to get protection of his right. The right holders are
required to furnish a General Bond with or without security to the Commissioner of
Customs [along with indemnity bond] prior to the grant of registration, undertaking
to execute consignment specific Bond along with security, as may be prescribed by
the Commissioner of Customs at the port of interdiction within three days from
the date of interdiction of any allegedly infringing goods.
4.
Considering
the genuine difficulties expressed by the right holders and keeping in view the opinion of the
Law Ministry, it has been decided to implement an on-line, system driven,
centralized bond management module as part of the existing
Automated Recordation and Targeting System (ARTS). The main objective of this system is to provide for a
single centralized bond account
with security that can be used at all ports in India, so that
the right holders do not have to rush to different customs
formations to execute consignment specific bonds with securities in case of interdiction
of allegedly infringing consignments at
the different Customs formations.
The highlights of this module are as
below:
(i) The right holders will have the
option to furnish either a general bond
before registration followed by a consignment specific bond at the port of interdiction of allegedly
infringing goods or a centralized bond at the port of registration which will
be valid at all ports in India. The general bond and the consignment
specific bond, which are off-line, will be in the formats prescribed hitherto as per Annexure-A and
Annexure-B to Circular No. 41/2007 -Customs dated 29th October 2007. Alternatively, as
stated above, the right holders can
furnish a Centralized Bond (which will be a running bond) at the port of
registration for an amount sufficient in their judgment, to correspond to value
of suspected allegedly infringing goods, all over India, as per Annexure-I to
this circular. The existing right
holders, who have registered their rights with customs authorities (equipped with a valid
UPRN and UTRN) can migrate to the centralized
bond management system by communicating their willingness and submitting the centralized bond
with Security in the prescribed format to the same Commissioner of Customs, where
the general bond was initially furnished. Otherwise, they will continue to
operate in the system of general bond and consignment specific bonds.
(ii) The
right holders exercising the option of a Centralised Bond will have to necessarily furnish a security for
an amount equivalent to 25% of the value of the Centralized Bond with the customs
formation, where the right holder is registered.
(iii) Upon
fulfillment of requirements by the right holders, the customs formation, where the right holders are
registered, will create an on-line centralized bond account and security account. The
system will generate a unique Bond Registration
Number (BRN) and the same will be e-mailed to the right holder or his/her authorised
representative, whose e-mail id is provided in the notice given by the right holders. All future
correspondence relating to bond management shall be with reference to this BRN
only. There will be a single BRN for a right holder which may cover more than
one Unique Permanent Registration Number (UPRN).
In other words, a centralized bond account can cover one or more rights
registered by a right holder with the Customs. However, to enable linking of all
UPRNs of a right holder, the applicant (whether the right holder or the
service-provider/ consultants / law firms) has to be the same in all the UPRNs
which are to be so linked. Thus, if the right-holder chooses
two different law firms to register his Trademarks with the Custom Authorities
or registers one trademark himself and other through a service provider, then
both these UPRNs cannot be linked through a single Bond as the applicants in
the two UPRNs would
be different.
(iv) In
case of
interdiction of allegedly infringing goods, if the amount of Centralised Bond and
the security are not sufficient to
cover the value of the goods interdicted, then within three days of
interdiction, the right holders would be required to execute a supplementary bond (as per Annexure
- II to this circular) and furnish security for the corresponding amount. The
supplementary bond, along with security has to be executed invariably with the
Commissioner of Customs where the centralized
bond has been executed. Commissioners of Customs at other ports where the allegedly infringing
goods are interdicted can not accept the supplementary bonds.
(v) The
ARTS has
been so
designed that while the creation of Centralized Bond account, credit (top-up) of the amounts to
the bond and the security and cancellation thereof
are operated only by the officers of the customs formation where the Centralized Bond is executed, the
debit of amounts and re-credit of the amounts pertaining to those debits can be
done only by officers at the ports where the allegedly infringing goods are
interdicted, The re credit shall be done after verification of the fact that no
legal proceedings and dues are pending in relation to the debit.
(vi) While
the right holders who choose to execute general bond have to execute the consignment specific bond at
the port of interdiction within 3 days of interdiction of the consignment
allegedly infringing the
right of the right holders in terms of Circular No
41/2007-Customs dated 29th
October 2007, the right holders who
have opted for the Centralized bond and in whose case a BRN has been generated, have to inform in
writing the jurisdictional IPR Cell, where the allegedly
infringing goods have been interdicted, duly mentioning the BRN along with the
particulars of debits to be made in the bond and security accounts so that the
same can be verified and debited by the IPR cell. If the right holder fails to submit such a letter, customs
authorities will be under no obligation to suspend the clearance of the allegedly
infringing goods. It shall be responsibility of the right Holders to ensure that that
the Centralized Bond and security account has sufficient balance. In case of
inadequate balance, the same can be supplemented by executing a supplementary
bond with necessary security at the Custom House where registration has taken place
and the BRN has been generated. To enable this,
the right holders have been given an on-line facility to view and check their balance using the BRN-
(vii) Irrespective
of availment of either option i.e. execution of
General Bond and consignment
specific Bond
or Centralised Bond, the rights holders would be required to furnish an indemnity bond in the
format prescribed at Annexure-C to the Circular No 41/2007 -Customs dated 29th October 2007.
5. In case of suspension of clearance of goods by Customs
on its own initiative,
the right holder is required to give notice as laid down under rule 3 of the Intellectual Property Rights
(Imported Goods) Enforcement Rules, 2007 and to execute Bonds as specified in Rule
5 of the Rules. The right holder will now have the option to execute a general bond or
a centralized bond, as the case may be, following the procedure detailed in the
foregoing paragraphs.
6.
The
Deputy/Assistant Commissioner of Customs while intimating the right holder about interdiction of any
goods, will also intimate the value of the goods to the right holder so as to enable
him to work out the required bond amount or supplementary bond amount, along
with the security.
7.
The
IPR Cells will accept the requests for migration of existing IPR holders to the new system. The IPR cells
should properly monitor the work relating to execution of bonds. Monitoring of
the Bonds and securities including their closure and expiry is the prime
responsibility of the Commissioner with whom the right is registered. The closure of bond
will require checking and confirmation of the fact that there are no debits in the
centralized bond account pertaining to any of the UPRNs by any other Custom
House. All steps to renew the bank guarantees, wherever executed, shall be
initiated by the IPR Cells well within time and at least 15 days before the expiry of the bank
guarantee.
8.
8.The Board"s Circular
41/2007-Customs dated 29-10-2007 stands modified to the above extent.
9.
9. Wide publicity to this Circular may
be given by way of issuance of public notice and standing order. The Additional
Director General, Risk Management Division shall inform the actual date of
commencement of this new system and will issue separate set of instructions for
smooth operation of the centralized bond management
module to the Commissioners of Customs.
10.
10. Difficulties,
if any, faced in the implementation of this circular, may be immediately brought to the notice
of the Board.
11.
Please
acknowledge receipt.
12.
Hindi
version follows.
Yours faithfully,
(P. S. Pruthi)
Commissioner (Customs)
ANNEXURE-I
(Centralized Bond with Provision for Security Deposit)
BOND EXECUTED IN PURSUANCE OF
REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS WITH INDIAN CUSTOMS
[See Rule 5(a) of Intellectual
Property Rights (Imported Goods) Enforcement Rules, 2007]
[To be executed by the Right
Holder(s)]
KNOW ALL
MEN BY THESE PRESENTS THAT I/we ............................................................... residing at hereinafter referred to as "Right
Holder" (which expression shall include its successors / heirs, executors,
administrators and legal representatives) am/are held and firmly bound unto the
President of India hereinafter called the "President" (which
expression shall include his successors and his representative Officers like
Commissioner of Customs and his authorized officers) in the sum of Rs ........ (Rupees.............only) to be paid to the President
for which payment well and truly to be
made, I / we bind myself / ourselves, my / our
successors / heirs, executors, administrators and legal representatives firmly
by these presents.
Sealed with
my / our
seal(s) this ....................................... day of ................... 20...................................................................................
WHEREAS
The Commissioner of Customs or his
authorized Officer at .................. (hereinafter called the "Proper
Officer") has agreed to register the intellectual property right
(hereinafter abbreviated
as "IPR") held by me/us and to suspend clearance of goods suspected
to be infringing
the IPR held by me/us, depending on the information furnished by me/us and on
the basis of the declarations made by the Importers in the course of
importation, the Right Holder
hereby agrees to furnish such bond and security, hereinafter specified, in terms of Rule 5 (a) of the
Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.
The Right Holder has deposited with
the Proper Officer at ............ ............., the securities as mentioned in the Schedule hereunder
written of the face value of Rs .................................................................................................. (Rupees
........... only) endorsed in favour of.................................... as security for the due observance and performance of the
terms of conditions on the part of the Right Holder, prescribed as per the ibid Rules.
NOW,
IT IS HEREBY AGREED AND DECLARED that -
(i) The Right Holder shall keep the Customs
abreast of validity of registration obtained by him under the IPR laws namely
The Copyright Act, 1957; The Trade Marks
Act, 1999; The Patents Act, 1970; The Designs Act, 2000 and The Geographical Indications of Goods
(Registration and Protection) Act, 1999; expiry of the term of registration
and renewal thereof, if any; cancellation; grant of compulsory licence in accordance with the law etc.
(ii) The Right holder, having recognized
limitations of international trade and understood general functioning of
Customs, shall share the trends and information with Customs on an
on-going basis, about suspected imports of infringing goods violating the IPR
laws, as may be required to interdict consignments and to suspend the
clearance.
(iii) The Right Holder undertakes to
protect the importer, consignee and the owner of
the goods and the competent authorities against all liabilities that are incidental and ancillary to the act
of suspension of clearance of allegedly infringing goods, in case it is
established that the suspension is vexatious.
(iv) The Right Holder shall bear all the
costs towards sampling, destruction, demurrage and detention charges
incurred till the time of destruction or disposal of such infringing goods,
upon being confirmed.
(v) The Right Holder shall join the
proceedings as per the time lines prescribed in terms of the ibid Rules, failing
which, they agree, to not to object to the release of the goods.
(vi) The
President or the Proper Officer, without prejudice to any other mode of recovery may, inter alia, adjust
the security deposit / securities in part or full towards the dues arising out of
clause (iii) and (iv) supra.
(vii) In case the proceedings are not
final, the right holder agrees to renew the bank guarantee before 15 days of
expiry of the bank guarantee, failing which, the bank guarantee shall be encashed by the department.
The Schedule of Securities above
referred to [Particulars of the amount deposited, along with consignments, if any]
IN
THE WITNESS WHEREOF the Right Holder has herein set and subscribed its hands and seals the
day, month and year first above written.
SIGNED AND DELIVERED by the Right
Holder at.................
In the Presence of
:-
1...........................
2................................
Xxxxxxxxxxxxxx
Accepted
For and on behalf of the President
of India (Signature
of the Proper Officer with Official Stamp and Seal)
ANNEXURE
- II
(Supplementary Bond with Provision
for Security Deposit)
BOND EXECUTED IN PURSUANCE OF
REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS WITH INDIAN CUSTOMS
[See Rule 5(a) of Intellectual
Property Rights (Imported Goods) Enforcement Rules, 2007]
[To be executed by the Right
Holder(s)]
KNOW ALL MEN BY THESE PRESENTS THAT
the Proper Officer of Customs has
been pleased to accept on behalf of the President of India the Centralized bond
executed by us vide letter dated...........and assigned the Bond Registration
Number (BRN).........., in respect of the IPRs registered
with the Custom House and UPRNs............and ...............so generated against them,
And
Whereas the amount bound by myself
/ ourselves is inadequate to cover the suspension of clearances of any
suspect infringing future consignments and / or any suspect consignment already interdicted by
any customs formation in India, I/we .................... residing at................................hereinafter
referred to as "Right
Holder" (which expression shall include its successors / heirs, executors,
administrators and legal representatives) am/are held and firmly bound unto the
President of India hereinafter called the "President" (which
expression shall include his successors and his representative Officers like
Commissioner of Customs and his authorized officers) in the sum of Rs............. (Rupees........ .........only), in addition to any amount bound earlier, to be paid to the President
for which payment well and truly to be made, I / we bind
myself / ourselves, my / our
successors / heirs, executors, administrators and legal representatives firmly by these
presents.
Sealed with
my / our
seal(s) this ........................................ day
of ................20........................................................................................
WHEREAS
The Commissioner of Customs or his
authorized Officer at ............. (hereinafter called the "Proper
Officer") has agreed to register the intellectual property right
(hereinafter abbreviated
as "IPR") held by me/us and to suspend clearance of goods suspected
to be infringing
the IPR held by me/us, depending on the information furnished by me/us and on
the basis of the declarations made by the Importers in the course of
importation, the Right Holder
hereby agrees to furnish such bond and security, hereinafter specified, in terms of Rule 5 (a) of the
Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.
The Right Holder has deposited with
the Proper Officer at ............... , the additional securities as mentioned in the
Schedule hereunder written of the face value of Rs ..............................(Rupees.............only) endorsed in favour
of......................as security for the
due observance and performance of the terms of conditions on the part of the
Right Holder,
prescribed as per the ibid Rules.
NOW,
IT IS HEREBY AGREED AND DECLARED that -
(i) The Right Holder shall keep the Customs
abreast of validity of registration obtained by him under the IPR laws namely
The Copyright Act, 1957; The Trade Marks
Act, 1999; The Patents Act, 1970; The Designs Act, 2000 and The Geographical Indications of Goods
(Registration and Protection) Act, 1999; expiry of the term of registration
and renewal thereof, if any; cancellation; grant of compulsory licence in accordance with the law etc.
(ii) The Right holder, having recognized
limitations of international trade and understood
general functioning of Customs, shall share the trends and information with Customs on an
on-going basis, about suspected imports of infringing goods violating the IPR
laws, as may be required to interdict consignments and to suspend the
clearance.
(iii) The Right Holder undertakes to
protect the importer, consignee and the owner of
the goods and the competent authorities against all liabilities that are incidental and ancillary to the act
of suspension of clearance of allegedly infringing goods, in case it is
established that the suspension is vexatious.
(iv) The Right Holder shall bear all the
costs towards sampling, destruction, demurrage and detention charges
incurred till the time of destruction or disposal of such infringing goods,
upon being confirmed.
(v) The Right Holder shall join the
proceedings as per the time lines prescribed in terms of the ibid Rules, failing
which, they agree, to not to object to the release of the goods.
(vi) The
President or the Proper Officer, without prejudice to any other mode of recovery may, inter alia, adjust
the security deposit / securities in part or full towards the dues arising out of
clause (iii) and (iv) supra.
(vii) In case the proceedings are not
final, the right holder agrees to renew the bank guarantee before 15 days of
expiry of the bank guarantee, failing which , the bank guarantee shall be encashed by the department.
The Schedule of Securities above
referred to [Particulars of the amount
deposited, along with consignments, if any ]
IN
THE WITNESS WHEREOF the Right Holder has herein set and subscribed its hands and seals the
day, month and year first above written.
SIGNED AND DELIVERED by the Right
Holder at..................
In the Presence of
:-
1..................
2..................
xxxxxxxxxxxxxx
Accepted
For and on behalf of the President
of India (Signature
of the Proper Officer with Official Stamp and Seal)
