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TMI Blog2022 (2) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... isdiction of the Customs Act upon notice having been sent under section 108 of the Customs Act and concluded that penalty was rightly imposed - 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 a contrary view was taken. 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. The binding decision of the Division Bench of the Tribunal in Shafeek P.K. could not have ignored. In view of the Division Bench decision of the Tribunal, it has to be held that the Customs Act prior to 29.03.2018 was applicable only to the whole of India and not beyond the territorial jurisdiction of India. Penalty, therefore, could not have been imposed upon the appellant under section 112(a) of the Customs Act - Appeal allowed. - CUSTOMS APPEAL NO. 50079 OF 2020 - FINAL ORDER NO. 50146/2022 - Dated:- 18-2-2022 - MR. DILIP GUPTA, PRESIDENT AND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Arinits Sales Pvt. Ltd. directly; (d) The correct value of the goods was USD 1180/MT, which was shown in the actual invoices submitted by the importer in his statements; and (e) Excess/over amount of invoices which was remitted to so called supplier, M/s Asia Pacific Impex Pvt. Ltd., was adjusted between Ashish Chopra and Ankur Agarwal during local trading of goods. 4. The proposal made in the show cause notice dated 16.01.2018 to impose penalties under two different sections on the appellant was based on the proposition stipulated in paragraph 35.2 of the said notice, and it is as follows: 35.2 It appears from the above discussion that Shri Ankur Agarwal, Director of M/s Asia Pacific Impex Pvt. Ltd., Hong Kong Director of M/s Agarwal Associates Impex Pvt. Ltd., Delhi have abetted in mis-declaration of value of goods as discussed above leading to evasion of Anti-Dumping Duty and rendering the goods liable to confiscation by way of providing their companies name and documents for the so called sale and purchase of Melamine to Shri Ashish Chopra imported vide bill of entry no. 587505 dated 20.06.2014, 5943046 dated 27.06.2014 and 6073680 dated 09.07.2014. As such, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in section 112 of the Customs Act. Hence, no penalty was imposable upon the appellant under section 112 of the Customs Act; (v) Penalty under section 114AA of the Customs Act was not imposable upon the appellant as the appellant had not done any transaction knowingly or intentionally so as to attract the provisions of section 114AA of the Customs Act; (vi) The impugned order dated 14.10.2019 is liable to be set aside on the ground that it has been passed by the Principal Commissioner in gross violation of principles of natural justice inasmuch as the submissions made by the appellant to the said show cause notice dated 16.01.2018 have not been considered; and (vii) Assuming but not admitting that penalty under section 112(a) of the Customs Act could be imposed impossible for abetment but no penalty could imposed under section 114AA of the Customs Act. Moreover, no penalty can be imposed again for the same cause of action for which penalty was imposed under section 112 of the Customs Act. 8. Shri Sunil Kumar, learned authorised representative appearing for the department, however supported the impugned order and made the following submissions: (i) The trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lieve are liable to confiscation under section 111, shall be liable, - (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, subject to the provisions of section 114A, to a penalty not exceeding ten per cent. of the duty sought to be evaded or five thousand rupees, whichever is higher : Provided that where such duty as determined under sub-section (8) of section 28 and the interest payable thereon under section 28AA is paid within thirty days from the date of communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent. of the penalty so determined; (iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the mischief of the Customs Act, 1962. The provisions of the Act extend only to the whole of India and not beyond India. Apart from it, the Collector of Customs Central Excise, Cochin also has no jurisdiction under law to try a person in respect of something which was committed beyond India and in a foreign country which will not come within the mischief of the provisions of the Customs Act, 1962 9.2. Apart from above, he submits that there is a specific provision in Section 1(3) of the Foreign Exchange Regulation Act, 1973 specifically providing that the same applies to all citizens of India outside India and to branches and agencies outside India of companies or bodies corporate, registered or incorporated in India. Similar provisions are also available in Sections 3 and 4 of IPC whereas no such provision exists in the Customs Act, 1962. In the absence of any identical provisions in the Customs Act, the same cannot be invoked against a resident of a foreign country, even though an Indian. 13. Apart from holding in favour of the appellant on merits, we also find favour with the submissions of the learned advocate that the appellant being a resident of Dubai for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... living in the United States who was instrumental in supplying these goods, and in the misdeclaration of these goods. The contention on behalf of this appellant is that he was a resident in the United States and the provisions of the Customs Act would not apply to him. This contention has to be accepted as the Customs Act, 1962 does not have extraterritorial jurisdiction. (emphasis supplied) 17. Thus, Division Benches of the Tribunal have repeatedly held that prior to its amendment on 29.03.2018, Customs Act was applicable only to the whole of India and not beyond India. 18. It is only by an amendment made on 29.03.2018 that the Customs Act has been made applicable also to any offence or contravention thereunder outside India by any person. 19. Learned authorised representative appearing for the department has however placed reliance upon the decision of a learned Member of the Tribunal in Prerna Singh. In this case, the issue of jurisdiction of the Customs Act and its application to the appellant situated outside India was primarily challenged. A perusal of the decision indicates that on behalf of the appellant reliance had been placed on the Division Bench judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is required to be placed under the administrative penal law though in a legal sense it is not penal but nevertheless retributive (Gist has been borrowed from the article titled Criminal and Quasi-Criminal Customs Enforcement among the U.S., Canada and Mexico written by Bruce Zagaris and David R. Stepp.) 8. In a nut-shell, the discussion above would reflect the principle that whether violation of an act has an adverse effect to the State s interest, the same violation is to be dealt by the State itself and the violator is to be penalised irrespective of his/her nationality or place of residence.. It is in this prospective, the jurisdiction of sovereign State is to be understood though the general understanding of jurisdiction is based on the nationality of the perpetrator since nationals of a State remained under the sovereignty and owe their allegiance to it even though they are free to travel and reside outside its territory. It is in this contest that Foreign Exchange Regulation Act 1973 prescribing application of it to all citizens of India residing outside India and to branches, agencies situated outside India is to be understood and also application of section 4 of IPC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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