TaxTMI 
TaxTMI 
2022 (2) TMI 1021
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....mporters of Melamine were indulging in evasion of anti-dumping duty by over valuating the goods imported from China. It needs to be noted that anti-dumping duty in terms of the Notification dated 19.02.2010 was the difference between landed value of the goods and USD 1681.49 per metric ton. Thus, by declaring the value of goods at a rate above USD 1550, the importers were avoiding anti-dumping duty. The show cause notice called upon M/s Arinits Sales Pvt. Ltd.; Ashish Chopra, Director of M/s Arinits sales; Ajay Kapur, Proprietor of M/s Chemical Connection; Amit Agarwal, Director of M/s Yug International Pvt. Ltd.; and Ankur Agarwal, Director of M/s Asia Pacific Impex Pvt. Ltd., to show cause notice. 3. The show cause notice mentions that from the statements of Ashish Chopra, Director of M/s Arinits Sales Pvt. Ltd. and Ankur Agarwal, Director of M/s Asia Pacific Impex Pvt. Ltd., the following position emerged: (a) Ashish Chopra had shown purchase of the goods in his own company, M/s Kay Petrochem Ltd., Hong Kong, from Chinese suppliers and further shown that same goods to have been sold to M/s Asia Pacific Impex Pvt. Ltd., Hong Kong, a company owned by Ankur Agarwal; ....
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....ed 27.06.2014 and 6073680 dated 09.07.2014 by M/s Arinits Sales Pvt. Ltd." 6. A detailed reply dated 18.06.2019 was filed by Ankur Agarwal to the aforesaid show cause notice. However, the Principal Commissioner by order dated 14.10.2019 imposed penalty of Rs. 5,00,000/- under section 112(a) and a penalty of Rs. 10,00,000/- under section 114AA of the Customs Act upon the appellant. 7. Shri Ved Prakash Batra learned counsel appearing for the appellant made the following submissions: (i) The Director of Revenue Intelligence did not have the jurisdiction to issue the notice in view of the decision of the Supreme Court in Canon India Private vs. Commissioner of Customs [2021 (3) TMI 384- S.C.]; (ii) No penalty was imposable upon the appellant as the transaction of sale-purchase of Melamine by M/s Asia Pacific Impex Pct., Hong Kong, was done in Hong Kong and the authorities constituted under Customs Act do not have jurisdiction beyond the territory of India; (iii) There was proper purchase of 176 MT of Melamine by M/s Asia Pacific Impex Pvt. Ltd., Hong Kong, from M/s Kay Petrochem Ltd., Hong Kong, and thereafter sale to M/s Arinits Sales Pvt. Ltd., New De....
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....ion value of impugned goods; and (iv) The appellant is not correct in submitting that the authorities did not have the jurisdiction beyond the territory of India in view of the decision of a leaned member of the Tribunal in Prerna Singh vs. Commissioner of Customs (Import-II), Mumbai [2020 (372) E.L.T. 610 (Tri.-Mumbai)]. 9. The submissions advanced by the learned counsel for the appellant and the learned authorized representatives appearing for the Department have been considered. 10. Leaned counsel for the appellant submitted that penalty could not have been imposed upon the appellant for the reason that the transaction noted in the show cause notice relating to sale and purchase of Melamine by M/s Asia Pacific Impex Pvt. Ltd. Hong Kong were done in Hong Kong and custom authorities had no jurisdiction under the Customs Act beyond the territory of India. 11. It would, therefore, be necessary to examine the relevant provisions of the Customs Act and the decisions. 12. Section 112 of the Customs Act deals with penalty for improper importation of goods and the same is reproduced below: "112. Penalty for improper importation of goods, etc.- Any person, - ....
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....mmissioner of Customs, Cochin [2015 (325) E.L.T. 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) E.L.T. 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 the alleged prohibited goods, i.e. in November 2012, he was not in India. His last visit to India was only in July 2012 and that too for a limited period of 7 days. He submits that inasmuch as the provisions of Customs Act, 1962 extend only to the whole of India, the same cannot be invoked and made applicable to a person who is resident of Dubai. For the above purposes, he relied upon Tribunals decision in the case of C.K. Kunhammed Vs. CCE [199....
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....tronics Singapore Pte Ltd. vs Commissioner of Customs, Bangalore [2009 (240) E.L.T. 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 view of the lack of jurisdiction. Hence, we allow the appeal and set aside the penalty imposed by the Commissioner in the impugned order." (emphasis supplied) 15. Yet another Division Bench of the Tribunal in Commissioner of Customs, Central Excise & Service Tax, Hyderabad-II vs G.M.K. Products Pvt. Ltd. [Customs Appeal No. 64 of 2010 decided on 20.01.2020] observed that at the relevant time, the Customs Act exte....
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....e, 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 violation of law and accordingly to punish the violator and not to determine if such violation has been committed by a legal person based in the Country or not. 7. Sovereign country asserts extra territorial jurisdiction in criminal laws though the principal basis of jurisdiction over crime is the territorial principle which permits a State in control....