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TMI Blog2021 (3) TMI 775X X X X Extracts X X X X X X X X Extracts X X X X ..... course for the Bench of two learned Judges to adopt is to refer the matter before it to a Bench of three learned Judges setting out the reasons why it could not agree with the judgment rendered by three Hon ble Judges. It is only when the Bench of three learned judges also comes to a conclusion that the earlier judgment of a Bench of three learned Judges is incorrect, that a reference to a Bench of five learned Judges would be justified. The learned Member could not have ignored the binding decision of the Division Bench of the Tribunal in SHAFEEK P.K., KERALA VERSUS CC, COCHIN [ 2015 (9) TMI 1257 - CESTAT BANGALORE] . In case the learned Member was not inclined to accept the view taken by the Division Bench that the Customs Act was applicable only within the territory of India and not beyond the territory of India prior to 29.30.2018, judicial discipline and propriety required the learned Member to make a request for the matter to be placed before a Division Bench of the Tribunal, which could then have examined whether the Division Bench decision of the Tribunal in Shafeek P.K. required any reconsideration, but that was not done. Even if there was only a decision of a learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ior to its amendment on 29.03.2018, provided that the Act would extend to the whole of India. The amended section, however, makes the Act applicable also to any offence or contravention thereunder committed outside India by any person. It is reproduced below:- Section 1 (2). It extends to the whole of India and, save as otherwise provided in this Act, it applies also to any offence or contravention thereunder committed outside India by and person. 4. The issue that is involved in both the appeals is as to whether during the relevant period i.e. 2012-13, the Customs Act was applicable only to the whole of India or whether it was applicable also beyond the territorial jurisdiction of India, in which case penalty could be imposed on companies incorporated abroad. The learned Member, after making reference to the decisions of the cited on behalf of the appellant in support of the contention that the Customs Act is applicable only within the territory of India and not beyond it and so penalty could not be imposed on companies situated outside India, also noticed that a learned Member of the Tribunal in the appellant s own case in Prerna Singh, CEO M/s Seville Products Ltd. vs C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest; (v) in the case of goods falling both under clauses (ii) and (iii), to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest. 7. A Division Bench of the Tribunal in Shafeek P.K. vs Commissioner of Customs, Cochin, 2015 (325) ELT 199 (Tri.-Bang.) , after placing reliance upon a decision of a learned Member of the Tribunal in C.K. Kunhammed vs Collector of Central Excise Customs, 1992 (62) ELT 146 (Tribunal), observed that the provisions of the Customs Act would extend only to the whole of India and could not be made applicable to a resident of Dubai. The relevant portion of the decision is reproduced below : 9.1. Learned Advocate Shri Karan appearing for the appellant has assailed the impugned order on the point of jurisdiction as also on merits. It is the contention of the appellant that admittedly he is a resident of Dubai and has been staying there for over two decades. Even at the time of export of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been able to show us any other decision laying to the contrary. As such, we find favour with the appellant on the point of jurisdiction also. 14. As a result, the impugned order is set aside insofar as the same imposes penalty of ₹ 10 lakhs (Rupees ten lakhs only) on the appellant and the appeal is allowed with consequential relief. (emphasis supplied) 8. Another Division Bench of the Tribunal in Guru Electronics Singapore Pte Ltd. vs Commissioner of Customs, Bangalore, 2009 (240) ELT 56 (Tri.-Bang.) also observed that since the provisions of the Customs Act extend only to the whole of India, proceedings against a company which is incorporated abroad cannot be sustained. The relevant portion of the decision is reproduced below : 2. On a very careful consideration of the entire issue, we find that the company is incorporated in Singapore and the penalty is on the company. It is very evident that the provisions of the Customs Act extend to the whole of India. When this is the case, the authorities in India do not have jurisdiction over a company incorporated abroad. Hence the proceedings against a company which is incorporated abroad cannot be sustained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act and its application to the appellant is primarily challenged in the present appeal, besides the legality of the Order of the Commissioner. Though the issue appears to be small it has wide ramifications. No Municipal law can ever be extended beyond the territorial boundaries of a country including its continental self and exclusive economic zone, whether or not there is express provision in the Act or statute to stretch the same beyond the country s territory since the same would amount to encroachment upon the territorial authority of other State. It is therefore, defined in the Statute of the country that the said Act has its application within the territorial limits of the country. Likewise in case of penal statute, it is clearly defined that the act or its violation should have its effect and consequence within the territorial limit of the said country. If violation of provision of statute is committed within the said country, then the consequence in conformity to the legal provision of the country would ensue, no matter the violator is a resident of the country or an alien. It is, therefore, necessary to determine if the act or its omission committed is in viol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 provides judicial power of punishment to any person for violation of any Indian law. Such primary distinction is not noticeable in the judgement of Shafeek P.K. v. CC, Cochin-2015 (325)ELT 199 cited Supra. (emphasis supplied) 14. After having made the aforesaid observations, the learned Member also noted that the appellant had subjected to the jurisdiction of the Customs Act upon notice having been sent under section 108 of the Customs Act and concluded that penalty was rightly imposed. 15. It would be seen from a perusal of the aforesaid decision that though the Division Bench decision of the Tribunal in Shafeek P.K . and the decision of a learned Member of the Tribunal in C.K. Kunhammed had been placed, which decisions clearly held that at the relevant time the Customs Act extended only to the whole of India and not beyond the territorial jurisdiction of India, but the learned Member took a contrary view. It appears that the amendment made in section 1(2) of the Customs Act with effect from 29.03.2018 was not brought to the notice of the learned Member. 16. In our opinion the learned Member could not have ignored the binding decision of the Division Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of three learned Judges of this Court and whether, for that reason, they can refer the matter before them directly to a Bench of five Judges? 3. We may point out, at the outset, that in Bharat Petroleum Corporation Limited v. Mumbai Shramik Sangha and Ors., [2001] 4 SCC 448, a Bench of five Judges considered a some what similar question. Two learned Judges in that case doubted the correctness of the scope attributed to a certain provision in an earlier Constitution Bench Judgment and, accordingly, referred the matter before them directly to a Constitution Bench. The Constitution Bench that then heard the matter took the view that the decision of a Constitution Bench binds a Bench of two learned Judges and that judicial discipline obliges them to follow it, regardless of their doubts about its correctness. At the most, the Bench of two learned Judges could have ordered that the matter be heard by a Bench of three learned Judges. 6. In the present case of the Bench of two learned Judges has. in terms, doubted the correctness of a decision of a Bench of three learned Judges. They have, therefore, referred the matter directly to a Bench of five, Judges, in our view, judicial di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is, therefore, clear from the aforesaid Constitution Bench judgments of the Supreme Court that judicial discipline and propriety demands that a Bench of two learned Judges should follow the decision of a Bench of three learned Judges, but if a Bench of two learned Judges concludes that an earlier judgment of three learned Judges is so very incorrect that in no circumstances can it be followed, the proper course for the Bench of two learned Judges to adopt is to refer the matter before it to a Bench of three learned Judges setting out the reasons why it could not agree with the judgment rendered by three Hon ble Judges. It is only when the Bench of three learned judges also comes to a conclusion that the earlier judgment of a Bench of three learned Judges is incorrect, that a reference to a Bench of five learned Judges would be justified. 21. In our opinion, once the Division Bench decisions of the Tribunal had been placed before the learned Member deciding this Appeal, the learned Member was bound by the Division Bench decisions of the Tribunal and the decision of a learned Member of the Tribunal in Prerna Singh could have been ignored. For this reason, we find substance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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