Proof of smuggled character required for non-notified goods; erased origin marks alone cannot sustain confiscation or penalty.

For non-notified and non-specified goods, the department must prove smuggled character by legal evidence; erased marks of origin alone do not justify confiscation or penalty. Where the inspection report only showed erased origin markings and there was no finding that the goods were of foreign origin or any independent evidence of smuggling, mere suspicion could not displace the burden of proof. Confiscation and penalty were therefore held unsustainable and were set aside, with consequential relief granted to the appellant.

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Issues: Whether confiscation of goods and imposition of penalty could be sustained merely on the basis that the marks of origin were erased, when the goods were not notified under Chapter IVA or specified under Section 123 of the Customs Act, 1962.

Analysis: The goods were found in small quantities and the inspection report only noted that the marks of origin were erased. There was no finding that the marks showed foreign origin, nor any independent evidence establishing that the goods were smuggled. Since the goods were neither notified goods nor specified goods, the burden lay on the department to prove their smuggled character. A mere suspicion arising from erased markings could not replace legal proof.

Conclusion: The confiscation and penalty were not sustainable and were set aside in favour of the appellant.

Final Conclusion: The appeal succeeded and the appellant obtained consequential relief.

Ratio Decidendi: In the case of non-notified and non-specified goods, smuggled character must be proved by the department by legal evidence, and suspicion arising from erased origin marks alone is insufficient to sustain confiscation.

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