Territorial jurisdiction under customs law extends to penalty proceedings against all persons liable when smuggled goods are seized within jurisdiction.

Where smuggled goods are seized within an officer's territorial jurisdiction, the Customs Act permits that officer to adjudicate confiscation and penalty proceedings against all persons liable under Section 112(b), even if some acted outside the territorial limits. The Court reasoned that the Act contains no territorial restriction confining action only to persons physically present within the officer's area, and civil procedure concepts of territorial jurisdiction cannot be imported to limit customs adjudication. It also held that there was no statutory bar in Section 122 preventing such proceedings where the seized goods were within jurisdiction and liable to confiscation under Section 111.

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Issues: Whether the second respondent had jurisdiction to impose penalty under Section 112(b) of the Customs Act, 1962 on a person who was outside its territorial limits, where the seized smuggled goods were within its jurisdiction.

Analysis: The seizure of the gold bars at Coimbatore was within the territorial jurisdiction of the second respondent. The Court held that the Customs Act does not impose any restriction that would confine action only to the person physically present within the officer's territorial limits. Once the goods were seized within jurisdiction and were liable to confiscation under Section 111, the officer competent to adjudicate that seizure could proceed against all persons found liable under Section 112(b), including persons who had dealt with or transferred the goods outside the territory. The Court further held that notions of civil procedural territorial limits could not be imported to curtail adjudication under the Customs Act, and there was no statutory bar in Section 122 against proceeding in such circumstances.

Conclusion: The second respondent had jurisdiction to proceed against the petitioner and levy penalty under Section 112(b) of the Customs Act, 1962.

Ratio Decidendi: Where smuggled goods are seized within an officer's territorial jurisdiction, that officer may adjudicate penalty against all persons liable under Section 112(b) of the Customs Act, 1962, even if some such persons acted outside the territorial limits, because the Act contains no territorial restriction of that kind.

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