2008 (9) TMI 808 - AT - Customs

Summary

Issues involved: Jurisdiction of authorities over a company incorporated abroad, imposition of penalty under Section 112(a) of the Customs Act for abetting smuggling, violation of principles of 'Natural Justice' due to non-receipt of show cause notice.

In the judgment, the Appellate Tribunal CESTAT, Bangalore addressed the issue of jurisdiction over a company incorporated abroad in the context of penalty imposed under Section 112(a) of the Customs Act for abetting smuggling. Initially, a Final Order was passed setting aside the penalty due to the appellant not receiving the show cause notice, citing a violation of 'Natural Justice'. However, a Rectification of Mistake application was filed by the Department, indicating that the GPA holder of the appellant's company did receive the notice, leading to a decision to re-hear the matter. The re-hearing was scheduled for a later date to ensure justice was served.

Upon careful consideration, the Tribunal observed that the company in question was incorporated in Singapore, while the penalty was imposed on the company under the Customs Act, which extends to the entirety of India. Highlighting the lack of jurisdiction of Indian authorities over a company incorporated abroad, the Tribunal concluded that proceedings against such a company could not be sustained. Consequently, the appeal was allowed, and the penalty imposed by the Commissioner in the impugned order was set aside. The judgment was pronounced in open court on 23-9-2008.