Customs duty and penalties on imported cars cannot be fastened on a bona fide purchaser without proven contravention.

Customs duty on an imported car is recoverable from the importer, and a joint demand against a later purchaser is not permissible. A bona fide purchaser, without knowledge of any misdeclaration or restriction, cannot be saddled with redemption fine or penalty. The alleged breach of a public notice restricting sale was also not established because the notice did not support the restriction asserted by the adjudicating authority, and it contemplated sale in the open market after return to India. The purchaser therefore obtained relief against the duty demand, redemption fine, and penalty.

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Issues: (i) Whether customs duty could be demanded jointly from the purchaser and the importer, or only from the importer; (ii) Whether redemption fine and penalty could be sustained against a bona fide purchaser of the car; (iii) Whether the alleged violation of the public notice restricting sale of the imported car was established.

Issue (i): Whether customs duty could be demanded jointly from the purchaser and the importer, or only from the importer.

Analysis: Duty under the customs law is recoverable from the importer. A joint demand against the purchaser as well as the importer was not permissible. The liability to pay the differential duty, if any, remained on the original importer.

Conclusion: The demand of duty against the appellant was unsustainable.

Issue (ii): Whether redemption fine and penalty could be sustained against a bona fide purchaser of the car.

Analysis: The appellant was found to be a bona fide purchaser whose object was only to possess the car. Redemption fine could not be levied on the purchaser, and penalty could not be sustained where the purchaser was not shown to have knowledge of the alleged misdeclaration or restriction.

Conclusion: The redemption fine and penalty imposed on the appellant were unsustainable.

Issue (iii): Whether the alleged violation of the public notice restricting sale of the imported car was established.

Analysis: The restriction invoked by the adjudicating authority was not supported by the terms of the public notice. The notice contemplated freedom to sell the car in the open market after return to India, and the alleged contravention was not established on the facts.

Conclusion: The alleged violation of the public notice was not proved.

Final Conclusion: The appellant succeeded in challenging the customs duty demand, redemption fine, and penalty, and obtained consequential relief.

Ratio Decidendi: Customs duty, redemption fine, and penalty in relation to an imported car cannot be fastened on a bona fide purchaser where the liability belongs to the importer and the alleged contravention is not established.

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