CESTAT quashes penalties under Section 112(a) for foreign-settled parties due to lack of territorial jurisdiction

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....CESTAT allowed the appeal challenging penalties imposed under Section 112(a) of the Customs Act, 1962 for alleged undervaluation of imported goods. The appellants, settled abroad, were penalized based on intelligence reports and search operations at domestic premises. The tribunal held that proceedings against foreign-settled parties lacked territorial jurisdiction, as the Customs Act's extraterritorial provisions only became effective from March 29, 2018, after the relevant period. Relying on precedent involving foreign incorporated companies, CESTAT ruled that adjudication authority had no jurisdiction over persons beyond Indian territory. The tribunal found statements relied upon by adjudication authority inadmissible as evidence and concluded penalties were unsustainable due to jurisdictional limitations and absence of admissible evidence supporting willful fraud allegations.....