2021 (4) TMI 525 - AT - Customs

Territorial Jurisdiction - Levy of penalty u/s 112(a) of the Customs Act 1962 - import of confectionery items from Dubai - Allegation of under valuation by DRI - error in not relying on th decision of Larger Bench of this Tribunal in M/S SEVILLE PRODUCTS LIMITED VERSUS COMMISSIONER OF CUSTOMS NEW DELHI 2021 (3) TMI 775 - CESTAT NEW DELHI - appellant is located in Dubai outside of India and having no office in India - HELD THAT - It was inquired from the ld. A.R. about the decision of the Larger Bench on this issue by this Tribunal passed in 2021. The ld. A.R. fairly accepted that he is not aware of the decision. It is very unfortunate that the departmental officers appearing before this Court are not updated with the latest judgments of this Tribunal. As there is a decision of the Division Bench of this Tribunal which is against the Revenue but the ld. A.R. said that he will rely on the decision of the Single Member Bench of this Tribunal which is in their favour but he will not rely on the decision of the Division Bench which is having higher value in the eyes of law. The said act of the ld. A.R. cannot be appreciated at all being an officer of the court. It is expected from the officer of the court to assist the court. As section 1 sub section (2) of the Customs Act 1962 admittedly is having jurisdiction in only within whole of India and its territories and cannot be extended beyond India and the appellant is located outside of India therefore no penalty can be imposed on the appellant under Customs Act 1962 - appeal allowed - decided in favor of appellant.

Summary

Issues: Jurisdiction of Customs Act, 1962 over appellant for penalty imposition.

Analysis:
1. The appellant appealed against a penalty of Rs. 1 lakh imposed under Section 112(a) of the Customs Act, 1962. The appellant, based in Dubai with no office in India, supplies confectionary items to Indian importers. The penalty was initiated by a show cause notice from DRI related to under valuation by an importer, M/s Royal Import & Export.

2. The appellant's counsel argued that the Customs Act, 1962 does not apply to the appellant for penalty imposition as its jurisdiction is limited to India and its territories. Reference was made to a case decided by the Larger Bench of the Tribunal. On the contrary, the authorized representative (A.R.) relied on a Mumbai Bench decision regarding another company, M/s Prerna Singh, CO of the appellant company.

3. The Tribunal considered the submissions and noted the A.R.'s lack of awareness regarding a recent decision by the Larger Bench. The A.R. chose to rely on a Single Member Bench decision in their favor, ignoring the Division Bench decision which holds higher legal value. The Tribunal criticized the A.R. for not being updated with the latest judgments and failing to assist the court, as expected from an officer of the court.

4. The Tribunal held that Section 1, sub-section (2) of the Customs Act, 1962 has jurisdiction only within India and its territories, not beyond. Since the appellant is situated outside India, the Act's penalty provisions cannot be enforced on them. Consequently, the impugned order imposing the penalty was found to lack merit and was set aside. The appeal was allowed, granting consequential relief to the appellant.