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:
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(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