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TMI Blog2021 (12) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed on first check basis. Wherein in the present case there is admitted case of collusion and forgery plus concoction of documents, including presenting and filing of false and incorrect documents (invoice), to evade Customs duty by the importer and the appellant company. Further, the present proceedings are for imposition of penalty and not for demand of duty under Section 28(4). The show cause notice on this appellant is not under Section 28(4) of the Customs Act. Fraud vitiates everything. Appeal dismissed - decided against appellant. - Customs Appeal Nos. 51953 & 52105 2019-SM - FINAL ORDER Nos. 52058-52059/2021 - Dated:- 7-12-2021 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) Shri Rachit Jain, Advocate for the appellant Shri Y. Singh and Shri Rakesh Kumar, Authorised Representatives for the respondent ORDER The issue in these appeals is whether the penalty under Section 112(a) of the Customs Act have been rightly imposed on the exporter company (appellant), registered in Dubai, for their mal-practices in India through their Agent located in India and working for them in India. Appeal No. C/51953/2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant), M/s Repensa A/S, Denmark and M/s Kelsen Group A/S, Denmark, to import food items namely confectionary by mis-declaring the value as well as the RSP of the goods with intention to clear the same without payment of appropriate customs duty. As part of the modus operandi the overseas suppliers have been raising two sets of invoices for each consignment one of lower value, which was submitted to customs for clearance and the other showing the actual value (which was the basis of settling accounts between supplier and M/s SRI). While the lower amount as per the first invoice was remitted through banking channel, the differential duty as per the second invoice was handed over in cash to Shri Kaivan Balsara in the case of import from M/s Repensa A/S, Denmark and M/s Kelsen Group A/S, Denmark and to Shri Prakash Menon, the Indian Agent in the case of import from M/s Seville Products Limited, Dubai. However, the overseas suppliers used to maintain statement of accounts (SoA) for supplies made to M/s SRI, which was as per the actual (higher) value. It appeared that M/s SRI have been mis-declaring the value of the items imported, in collusion with the suppliers with intention to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pensa A/S, Denmark and M/s Kelsen Group A/S, Denmark and through Shri Prakash Menon in case of import from M/s Seville Products Ltd., Dubai. It has further come out in the investigation that invoice for suppressed value was received by the importers through normal channel and the second invoice for true value / transaction value was received by hand by M/s SRI through Shri Kaivan Balsara/ Shri Prakash Menon. On the conclusion of the transaction the second invoice / parallel invoice was destroyed by the parties to prevent detection. It was further admitted by Shri Kewal Takkar, Partner of M/s SRI that the imported goods were undervalued by 65% to 75% of the actual value, and also admitted that the differential value was paid in cash to the Indian Representative. It further appeared that the parties in collusion with each other have forged and falsified documents to evade custom duty. 6. Shri Prakash Menon, Indian Representative of M/s Seville Products Limited, Dubai in his statement recorded on 14.05.2017 inter alia stated that he was looking after sales and marketing of M/s IFFCO, UAE, parent company of Tiffany Brand and for M/s Seville Products Limited, Dubai which was a group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06.05.2016 on contest. The appellant M/s Seville Products Limited, Dubai inter alia, among other grounds urged that no penalty was imposable on them as the Customs Act, 1962 does not have extra territorial jurisdiction/application. They also placed reliance on the following rulings- i) British India Steam Navigation Co. Ltd. vs. Shanmughavilas Cashew Indus.-1990 (3) SCC 481 ii) Hi Lingos Co. Ltd. vs. Collector of Customs -1994 (72) ELT 392, which have been affirmed by Hon‟ble Supreme Court at 1997 (95) ELT A147, iii) C. K. Kunhammed vs. Collector of Central Excise Customs -1992 (62) ELT 147. iv) Bussa overseas Properties Pvt. Ltd. Vs. C. L. Mahar -2004 (163) ELT 304, which is confirmed by the Apex Court, reported at 2004 (163) ELT A160 (SC). It was further urged that no penalty is imposable on M/s Seville Products Ltd., as they have not done any act which rendered goods liable to confiscation under Section 111 of the Customs Act, 1962. 10. The Adjudicating Authority took notice that M/s SRI (importer) have admitted the allegation and have settled their dispute before the Settlement Commission, which include M/s SRI and its Partners, as well as Shri Kaiva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility of the owner, importer or exporter, be deemed to be the owner, importer or exporter of such goods for such purposes including liability therefor under this Act . Thus, penalty can be imposed on the foreign company through their Indian representative, Sh. Prakash Menon. Accordingly, the Joint Commissioner imposed penalty of ₹ 23 lakhs on the appellant company through their Indian representative Sh. Prakash Menon under Section 112(a) of the Customs Act, 1962. 13. Being aggrieved, the appellant filed the appeals before the ld. Commissioner (Appeals) who vide the impugned orders-in-appeal dated 08.05.2019 02.05.2019 have been pleased to dismiss the appeal upholding the orders-in-original. 14. Being aggrieved, the appellant is before this Tribunal inter alia on the ground that imposition of penalty is bad as the Customs Act, 1962, during the relevant period did not have extra territorial application. It is further urged that as the importer - M/s SRI have settled the dispute of differential duty etc. before the Settlement Commission, this appellant being a co-noticee is also entitled to the benefit, and their case is deemed to have been settled. For this proposition, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench decision and the decision of Prerna Singh (supra) could not have been ignored. Further, the binding ruling of the Division Bench in the case of Shafeek P.K. could not have been ignored. Reliance is also placed on the Single member ruling in the appellant‟s own case reported in 2021-TIOL 2015-CESTAT-CHD. 14.1 It is further urged that the Customs Act, 1962 did not have extra territorial jurisdiction prior to 2018 amendment. It is urged that the appellant is a foreign company incorporated in Dubai, UAE. They do not have any business operation in India and is not undertaking any commercial activity within India at any point of time. None of the alleged acts have been committed by the appellant company in the Indian Territory. The entire amount received by the appellant company from the Indian importers have been shown in their books of accounts. It is further urged that the CEO of the appellant company (Prerna Singh) who appeared before the Customs Department DRI during investigation and tendered her statement, is also a non-resident Indian. It is urged that Indian statutes / laws are ineffective against the foreign property and foreigners. 14.2 It is further urged t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire amount received by them from Indian exporters has been shown in its books of account to substantiate that they are not involved in the conspiracy is absurd, as the appellant company had knowingly and intentially lured such importers with making larger profits if involved with import from the appellant company, by submitting two types of invoices and by arranging hawala agent for the Indian importers to send the balance payment, thereby abetting in evasion of customs duty in India. Non imposition of any corporate tax in Dubai and strict penal provisions as per laws and regulations may be the reason for them to show the full amount in its books of account. Had there been any corporate tax they might have shown the payment only through banking channels and would have omitted the payment through hawala channels in their books of account. iv) On the submissions by the appellant as per para 4 that Customs Act did have extra territorial jurisdiction, the headlines itself speaks volume. 1A) During the relevant period Section 1(2) of the Customs Act, 1962 was applicable which reads as below: 1) This Act may be called the Customs Act, 1962 2) It extends to the whole ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been committed in India through the employee of the Company registered in Dubai. Preparing two types at invoices of Dubai was not offence, till it was submitted before the Customs Authority in India, through the Computer of its employee Sh. Prakash Menon (stationed in India). Thus the offence was committed in India itself and the jurisdictional applicability of the Customs Act is there as it extends to whole of India, as per Sec. of the Customs Act, 1962. 16. It is further urged that admittedly the appellant was present in India through its representative/ agent and thus for their various acts of omission and commission which include fraud and forgery for evading the Customs duty to the Government of India, is liable for penalty under Section 112(a) as they have aided and abetted the Indian importers in violating the various provisions of the Customs Act, rendering the goods liable for confiscation. It is further urged that the rulings cited are not applicable in the instant case. Further, reliance was placed in the case of Prerna Singh, CEO (supra) of the appellant company, wherein imposition of penalty was held to be correct and under proper jurisdiction being guilty of a ..... 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