The Commissioner Of Customs ... vs Navshiv Retails Pvt. Ltd.
2014 Latest Caselaw 7139 Del

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*IN THE HIGH COURT OF DELHI AT NEW DELHI
+                   CUSAA NO. 47/2014
                                     Date of decision: 23rd December, 2014
       THE COMMISSIONER OF CUSTOMS (I&G)                     ..... Appellant
                          Through Ms. Sonia Sharma, Sr. Standing
                          Counsel, Mr. Vijay Chandra & Ms. Neha
                          Sharma, Advocates.

                          versus

       NAVSHIV RETAILS PVT. LTD.                           ..... Respondent
                    Through Nemo.

       CORAM:
       HON'BLE MR. JUSTICE SANJIV KHANNA
       HON'BLE MR. JUSTICE V. KAMESWAR RAO

SANJIV KHANNA, J. (ORAL):

       This appeal by the Revenue under Section 130 of the Customs Act,

1962 (Act, for short) impugns order dated 17th April, 2014 passed by

Customs, Excise and Service Tax Appellate Tribunal (Tribunal, for short)

on appeal filed by M/s Navshiv Retail Private Limited. By allowing the

said appeal, the Tribunal has quashed and set aside redemption fine and

penalty. The original adjudicating authority had directed re-export of the

said goods on redemption fine to Rs.3 lacs and penalty of Rs.1 lac, which

was reduced to Rs.1.45 lacs and Rs.80,000/- in the first appeal.

2.     The submission raised by the counsel for the appellant is that the

mobile phones, which were imported and for which customs clearance was


CUSAA No. 47/2014                                                   Page 1 of 3
 sought,     did     not   have   requisite   International   Mobile Equipment

Identification (IMEI, for short) number. The IMEI number of the phones

had been allocated to handsets, which were manufactured by Nokia and

Samsung. The phones imported were bearing the brand name Mobiado.

3.     Learned counsel for the appellant has submitted that import of the

said mobile phones was illegal and a threat to national security. The

Tribunal, therefore, has erred in deleting redemption fine and penalty. It is

submitted that each phone is allotted a unique IMEI number and import of

mobile handsets without IMEI number is prohibited.

4.     We have considered the said contentions, but do not find any reason

to interfere with the impugned order. The finding of the Tribunal is that

the brand name Mobiado belongs to M/s Bonae Innovation Corporation, a

company incorporated in Canada. The said company is engaged in the

business of distribution and retail of mobile handsets by the name of

Mobiado. It is a luxury brand available all over the world. M/s Bonae

Innovation Corporation purchases mobile handsets manufactured by

original equipment manufacturers and embellishes them by their cutting

edge engineering technology. There is no change in the mobile handsets,

but the embellishment is done by replacing the casing. There are several

other mobile handset distributors and retailers like them, for example,

Vertu, Tag Heur and Porsche. The said companies embellish the mobile

handsets manufactured by others like Nokia and Samsung.

CUSAA No. 47/2014                                                     Page 2 of 3
 5.     Non-allocation and inscription of the IMEI number can be a security
hazard as the mobile phone instrument cannot be identified and cross
checked. Telephone service providers can identify the sim card and also
the mobile instrument with the IMEI code.         Thus, when required the
mobile phone instrument can be traced. SIM cards used in the mobile
phone can be ascertained. The original equipment manufacturer of the
mobile phone is not a matter of security concern, but IMEI number code
identification is a necessity and mandatory.
6.     The admitted position was that the mobile handsets did have IMEI
numbers. Once the IMEI number was mentioned on the mobile handset
and was duly declared, then there is no possibility or chance of misuse and
accordingly no threat to national security. IMEI number once embedded in
the mobile phone becomes the identification code for the said mobile
handset. There was no tampering with the said IMEI number. It has not
been explained, how and in what circumstances that there was a security
threat in the present case. The requirement that there should be an IMEI
code identification was satisfied.
7.     M/s Bonae Innovation Corporation had only done re-designing and
embellishing the casing of the existing handset by using their cutting edge
engineering technology. The aforesaid findings of fact are not disputed
and under challenge. The fact that the phones did have IMEI number is not
disputed. In view of the aforesaid position, we do not find any merit in the
present appeal and the same is dismissed.



                                               SANJIV KHANNA, J.

V. KAMESWAR RAO, J. DECEMBER 23, 2014 VKR