Subsequent purchaser of imported vehicle cannot be held liable for customs duty evasion by original importer

SC held that a subsequent purchaser of an imported vehicle cannot be held liable for customs duty evasion committed by the original importer. The appellant, who purchased the car through intermediaries, was neither the importer nor the legal owner as the vehicle remained registered in the original importer's name. The court ruled that only persons involved during importation until clearance for home consumption fall under the definition of "importer" in the Customs Act. Since the actual importer remained identifiable, proceedings against the appellant were unlawful. The confiscation and show-cause notices were quashed, and the appeal was allowed.

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Issues:
1. Interpretation of Sections 28, 124, and 125 of the Customs Act, 1962.
2. Liability of subsequent purchaser for customs duty.
3. Definition of "importer" and "owner" under the Customs Act and Motor Vehicles Act.
4. Confiscation of goods and payment of redemption fine.
5. Lawfulness of proceedings against the appellant.

Analysis:

The Supreme Court heard an appeal challenging the High Court's judgment in a customs duty matter. The appellant, a subsequent purchaser of a car, was served with a Show-Cause Notice for short-levied customs duty. The appellant argued that he was not the importer and therefore not liable to pay customs duty. The respondent contended that the appellant, as the possessor of the car, was the owner and thus liable for the duty. The Court examined the definitions of "importer" and "owner" under the Customs Act. It concluded that the appellant, not being the importer, could not be charged for customs duty under Section 28. The Court also analyzed Section 125, stating that the appellant was not the owner of the car as per the Motor Vehicles Act, as he was not registered as the owner. Therefore, the appellant was not liable to pay the duty or redemption fine.

The Court quashed the proceedings against the appellant, ruling them unlawful as the appellant was not the legal owner of the car. The High Court's judgment was set aside, and the order of the Appellate Tribunal in favor of the appellant was restored. The Court clarified that the respondent Department could proceed against the actual importer and owner of the car. The appeal was allowed, and no costs were awarded.

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