By TIOL News Service

MUMBAI, APRIL 18, 2017: PENALTIES of Rs.4.00 lakh each was imposed u/s 114(iii) of the Customs Act, 1962 by the Commissioner (Exports) on the ground that the appellants have abetted infringement of the copyright indulged by Jatinder Singh Bagga , Proprietor of M/s. Modern Exports , who attempted export of books in respect of which the copyright was held by a UK Company.

The facts are that Books were sold to J.S.Bagga by M/s. Enbee Education Centre Pvt. Ltd. in which both the appellants are Directors. Inasmuch as it is the stand of the department that as the export of said books were prohibited, the goods were liable for confiscation.

The appellant is before the CESTAT and submits that even though infringement of copyright was done but there is no provision either under the Customs Act or under Copyright Act restricting the export of any goods out of India. Furthermore, in terms of Section 51 of the Copyright Act there is prohibition for import of such goods but there is no prohibition for export of said goods. Reliance is placed on the decision in Sunbeam Exports - 2011-TIOL-1073-CESTAT-MUM. It is also informed that an identical case involving the same appellants was decided by the Commissioner(A) in favour of the appellant and as this order has not been appealed against by the department, the issue has attained finality.

The AR, while reiterating the findings of the impugned order, submitted that under section 51 of the Indian Copyright Act, 1957 there is a prohibition for sale or hire or by way of trade in respect of infringed copyright books.

The Bench extracted the contents of section 51 of the Indian Copyright Act, 1957 and observed –

+ From a plain reading of the above Section, I find that there is a prohibition for the sale and trading of the infringed copyright books and also a prohibition on import into India. However, there is no prohibition provided in respect of export of the same goods.

+ Therefore in the absence of any prohibition on the export of the said goods, the goods are not liable for confiscation. Consequently, the appellants are not liable for any penalty.

+ I also observed that the appellants are the Directors of M/s. Enbee Education Centre Pvt. Ltd . This private limited company sold books to M/s.Modern Exports , which is a proprietorship concern of ShriJSBagga . In this fact, I am of the view that the appellants role is only confined to sale of the infringed copyrights books within the country.

+ Accordingly, they are nowhere involved either in the export of books or even attempt to export of the said goods. For this reason also confiscation of the goods cannot be attributed to the present appellants.

Noting that the case law cited by the appellant is directly applicable to the facts of the present case and so also the fact that the order of the Commissioner(A) in appellants own case has been accepted by the department, the Bench concluded that export of “infringed copies” of the books is not prohibited under any law. And, therefore, the goods are not liable for confiscation and consequentlyno penalty is sustainable against the appellants.

The appeals were allowed.

(See 2017-TIOL-1278-CESTAT-MUM)