Customs duty liability follows the actual importer, and separate group companies cannot be made jointly liable for distinct imports.

Customs duty on an aircraft imported for later Indian registration was held unsustainable where the first importer removed it from India within the permitted period and the record showed no application to register the aircraft in India. An intention for future non-scheduled operations, by itself, did not establish breach of the original import declaration, so confiscation and penalties failed. For the later import, liability had to attach to the actual importer and not be imposed jointly and severally on separate corporate entities merely because they belonged to the same group. The customs authority at Delhi lacked jurisdiction over the Mumbai import, making the joint demand invalid.

---

---

Issues: (i) Whether customs duty, confiscation and penalties could be sustained against the aircraft on the footing that the initial import attracted duty because the aircraft was intended to be registered in India. (ii) Whether the demand could be raised jointly and severally against two distinct corporate entities and adjudicated by the Delhi Customs authorities when the later import by the appellant took place at Mumbai.

Issue (i): Whether customs duty, confiscation and penalties could be sustained against the aircraft on the footing that the initial import attracted duty because the aircraft was intended to be registered in India.

Analysis: The aircraft was first imported by one company and was removed from India within the six-month period contemplated by Rule 58(6)(a) of the Indian Aircraft Rules, 1920. The material on record did not show any application by that importer to register the aircraft in India. The existence of an intention to use the aircraft later for non-scheduled operations did not by itself establish a contravention of the declaration made at the time of the first import. On that basis, the foundation for confiscation and demand of customs duty against the first importer failed.

Conclusion: The duty demand, confiscation and penalties were not sustainable against the initial importer.

Issue (ii): Whether the demand could be raised jointly and severally against two distinct corporate entities and adjudicated by the Delhi Customs authorities when the later import by the appellant took place at Mumbai.

Analysis: Two group companies remained separate legal persons, and liability for customs duty had to be fastened on the person who actually imported the goods and was liable to pay duty. The appellant's import occurred at Mumbai, and any omission or commission concerning that import fell within the jurisdiction of the Mumbai Customs authorities. The Delhi Customs authorities lacked jurisdiction to adjudicate the later import, and a joint and several demand against distinct legal persons was impermissible.

Conclusion: The joint and several demand was invalid and the Delhi Customs authorities lacked jurisdiction over the appellant's Mumbai import.

Final Conclusion: The impugned order was set aside, the assessees' appeals were allowed, and the Revenue's appeals failed.

Ratio Decidendi: Customs duty can be demanded only from the person legally liable for the relevant import, and separate corporate entities cannot be made jointly and severally liable merely because they belong to the same group; jurisdiction lies with the customs authority competent for the place of import.

---