Page 221 - ELT_15th May 2020_VOL 372_Part 4th

2020 ] PRERNA SINGH v. COMMISSIONER OF CUSTOMS (IMPORT-II), MUMBAI 611

Unit through investigation found appellants and three others were resorting to
large scale under-invoicing and consequently by misdeclaring transaction value
as well as retail sales price (RSP) of confectionary items like wafers, cookies and
toffees etc. they were evading Customs duty during importation of these goods.
Statement of Prerna Singh (CEO) was recorded after she was summoned from
Dubai who admitted about issuing of two different invoices with different price
structures to the importer on regular basis for production of invoices having
lesser price before the Customs authority to avoid payment of tax and the other
one with proper price for business transactions. Statement of other connected
persons including importer named Prakesh Menon i.e. Indian representative of
appellant company were also recorded during investigation and ultimately they
were issued with show cause notices. Three of them settled the matter before the
Settlement Commissioner and both the appellants challenged the application of
Indian Customs Act to impose penalty on overseas company and person unsuc-
cessfully before the Commissioner Customs (Import-II) who confirmed penalty
of Rs. 2,50,000/- on the appellant company and penalty of Rs. 50,000/- on Prerna
Singh, its CEO under Section 112(a) of the Customs Act. Both the appellants are
before this Tribunal challenging legality of the said order passed by the Commis-
sioner (Customs).
3. In the memo of appeal and during the course of hearing of appeal,
Learned Counsel Mr. Akhilesh Kangsia for the appellant argued that prior to
amendment to the Customs Act, 1962 introduced on 29-3-2018, the same was ex-
tended only to the whole of India and not beyond India for which operation of
the Act beyond the territory of India cannot be made applicable to the overseas
suppliers of Dubai, UAE and its NRI CEO and subject them to penalty under
Section 112(a) of the Customs Act. With reference to the Hon’ble Supreme
Court’s decision in British India Steam Navigation Co. Ltd. v. Shanmughavilas Cash-
ew Indus - 1990 (3) SCC 481 = 1990 (48) E.L.T. 481 (S.C.), he argued that Indian
statute are ineffective against foreign property and foreigners. Further, with ref-
erence to the decision reported in 2017 (348) E.L.T. 168 (Tri. - Mumbai) in the case
of Narendra Lodaya v. Commissioner of Customs, Nhava Sheva, HI Lingos Co. v. Col-
lector of Customs decision delivered on 20th September, 1993 = 1994 (72) E.L.T. 392
(Tribunal) and decision of Customs Appeal No. 70148 of 2019 in the case of M/s.
Shakti Jewellers Pvt. Ltd. v. Commissioner of Customs = 2019 (368) E.L.T. A343 (Tri-
bunal), he also argued that appellants, being company and NRI based in Dubai
having no permanent establishment in India and having no place of business in
India, cannot be penalised under the provision of Customs Act which extends to
the whole of the Indian territory and not all over the world beyond India and
responsibility as well as obligation of the importer commences with filing of dec-
laration under Section 46 of Customs Act for which incident occurred prior to
that cannot be brought into the purview of the Customs Act. Placing reliance in
the case law reported in 2015 (325) E.L.T. 199 (Tri. - Bang.) in the case of Shafeek
P.K. v. CC, Cochin, Learned Counsel for the appellants argued that in Foreign
Exchange Regulations Act, 1973 and in IPC under Section 3 as well as 4, specific
provision exists for trial of citizens of India residing outside India and branches
of company or agencies located outside India but no such provision exists in
Customs Act and therefore in the absence of an identical provision in the Cus-
toms Act, the same cannot be invoked against resident of foreign country even
though he/she was an Indian for which he prays to set aside the order passed by
the Commissioner of Customs.
EXCISE LAW TIMES  15th May 2020  221