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2024 Supreme(SC) 1137
SUPREME COURT OF INDIA
B.V. NAGARATHNA, NONGMEIKAPAM KOTISWAR SINGH, JJ.
Nalin Choksey – Appellant
Versus
The Commissioner Of Customs, Kochi – Respondent
Civil Appeal No. 13393 of 2024(Arising out of SLP (C) No. 16123 of 2018)
Decided on : 27-11-2024
For the Petitioner(s): Mr. Shashibhushan P. Adgaonkar, AOR Mrs. Pradnya S Adgaonkar, Adv.
For the Respondent(s): Mr. Rupesh Kumar, Sr. Adv. Mr. Gurmeet Singh Makker, AOR Mr. V C Bharathi, Adv. Mr. H R Rao, Adv. Mr. Shashank Bajpai, Adv. Mr. Navanjay Mahapatra, Adv.
A subsequent purchaser of a vehicle cannot be held liable for customs duty if not the registered owner, as per the Customs Act and Motor Vehicles Act.
Headnote:(A) Customs Act, 1962 - Sections 28, 124, and 125 - Appeal against High Court judgment - Appellant, a subsequent purchaser, not liable for customs duty as he is not the importer or registered owner of the vehicle - Proceedings against appellant quashed, restoring Appellate Tribunal's order. (Paras 3, 12, 16, 17)
(B) Ownership and Liability - Definition of 'owner' under Motor Vehicles Act, 1988 - Appellant not registered owner, thus not liable for customs duty despite possession of the vehicle. (Paras 14, 15)
Facts of the case:
The appellant purchased a vehicle previously imported by another, later served with a Show-Cause Notice for short-levied customs duty. The Appellate Tribunal ruled in favor of the appellant, which was overturned by the High Court.
Findings of Court:
The proceedings against the appellant were unlawful as he was not the owner under the Customs Act, and the Appellate Tribunal's order was restored.
Issues: Whether the appellant, as a subsequent purchaser, is liable for customs duty and if the proceedings against him were lawful.
Ratio Decidendi: The court held that the appellant, not being the registered owner, cannot be held liable for customs duty, and the initiation of proceedings against him was unlawful.
Result: Appeal allowed and disposed of.
ORDER :
Leave granted.
2. Being aggrieved by the judgment dated 03.04.2018 passed by the High Court of Kerala at Ernakulam in Customs Appeal No.18/2009, the appellant is before this Court. By the said judgment, the High Court allowed the Customs Appeal filed by the respondent-Department answering the questions in favour of the Revenue and against the appellant herein.
3. Briefly stated, the facts are that one Sri Jalaludheen Kunhi Thayil had imported the vehicle in question being a ieod rsche Carrera Car on 28.06.2002. The said car was later sold to one Sri Shailesh Kumar in the year 2003. Subsequently, the appellant herein is stated to have purchased the said car in the month of October, 2004. It is stated that in the year 2006, the appellant, along with the importer Sri Jalaludheen Kunhi Thayil, the first possessor Sri Shailesh Kumar and a broker named Sri Haren Choksey who was the brother of the appellant, was served with the Show-Cause Notice dated 27.06.2007 demanding short-levied customs duty to the tune of Rs.17,92,847/-. The said Show-Cause Notice was issued under Section 28(1) read with Section 124 of the Customs Act, 1962 [“Customs Act”] and stated that it was a case of deliberate misdeclaration of model and the year of manufacture, along with tampering with the chassis number of the imported car for the purpose of under invoicing and under valuation of the vehicle and evading the payment of the differential duty of customs amounting to Rs.17,92,847/-. The appellant replied to the same by letter dated 24.07.2007. This was followed by an order-in-original dated 29.01.2008 passed by the Commissioner of Customs, Cochin. The Commissioner of Customs confirmed the demand of duty of Rs.17,92,847/- being the duty short-levied and short-paid on the imported vehicle and ordered the confiscation of the car with an option of redemption of the confiscated car on payment of fine and the differential duty. The demand was raised jointly and severely against the importer and the appellant.
4. Being aggrieved by the said order, the appellant herein preferred Appeal No. C/311/2008 before the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Bangalore (“Appellate Tribunal”), which was allowed in favour of the appellant herein vide Final Order No.1235/2008 dated 23.09.2008. The Appellate Tribunal held that the appellant herein is a bonafide purchaser who had not purchased the car from the original importer and therefore, he had no role in the import of the car or in the misdeclaration or in any offence connected with the import. Consequently, the appeal preferred by the appellant was allowed.
5. Being aggrieved by the said order of the Appellate Tribunal, the Department filed the Customs Appeal No.18/2009 before the High Court of Kerala. As already noted, by the impugned order dated 03.04.2018, the High Court set aside the order passed by the Appellate Tribunal by allowing the said appeal. The High Court, while answering the questions of law in favor of the respondent herein, observed that the payment of short-levy of duty is a necessary consequence of redemption of the goods under Section 125 of the Customs Act and since the appellant herein had exercised the option to redeem the goods, he was liable to pay the customs duty despite being a subsequent purchaser. Hence, this appeal before this Court.
6. We have heard learned counsel for the appellant and learned senior counsel for the respondent-Department and perused the material on record.
7. During the course of submissions, learned counsel for the appellant Sri Shashibhushan P. Adgaonkar drew our attention to Section 28 as well as Section 124 of the Customs Act and submitted that what is in issue herein is with regard to the non-payment of the import duty in respect of the Porsche Carrera car. The appellant is not the importer of the car but only a subsequent purchaser. The liability to pay customs duty is on the importer and not on a subsequent purchaser. Further, the
