Burden of proving smuggled character on Revenue failed where betel nuts were not shown to be foreign origin by trade opinion alone.

Betel nuts could not be treated as foreign-origin goods merely on the basis of local traders' opinions, as such trade opinion was insufficient to conclusively prove origin. Because the goods were non-notified under Section 123 of the Customs Act, 1962, the burden remained on the Revenue to establish that they were smuggled. In the absence of independent evidence from the Department, and where transport challans were admittedly available at the time of interception, confiscation and penalties were not sustainable, and the appeals were allowed with consequential relief.

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Issues: Whether betel nuts could be held to be of foreign origin and confiscated merely on the basis of trade opinion, and whether the burden of proving smuggled character lay on the Revenue in respect of non-notified goods.

Analysis: The betel nuts were treated as foreign origin only on the basis of opinions of local traders. Such trade opinion was held insufficient to conclusively establish foreign origin. The goods were non-notified under Section 123 of the Customs Act, 1962, so the burden to prove that they were smuggled remained on the Revenue. No independent evidence was produced by the Department, and the transport challans were admittedly available at the time of interception.

Conclusion: The confiscation order and the penalties were not sustainable, and the appeals were allowed with consequential relief.

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