Smuggled character must be proved by cogent evidence; foreign origin alone cannot sustain confiscation or penalties.

Goods not notified under Section 123 or Chapter IVA of the Customs Act cannot be presumed smuggled on foreign origin alone; the department must prove illegal import with cogent evidence. The record contained import documents and supporting material for the crockery sets and air-conditioners, and the department did not show those documents to be forged or unreliable. Because the adjudicating authority relied on an impermissible presumption from foreign origin and alleged weaknesses in the defence, the confiscation and penalties were held unsustainable and set aside.

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Issues: Whether the confiscation of the seized crockery sets and air-conditioners, and the consequential penalties, were sustainable when the goods were not notified under Section 123 or Chapter IVA of the Customs Act and the department failed to prove their smuggled character.

Analysis: The seized goods were freely tradeable and not covered by the statutory presumption applicable to notified goods. The initial burden therefore lay on the department to establish by cogent evidence that the goods had been illegally imported or were smuggled. Mere foreign origin, or a perceived weakness in the appellants' explanation, was insufficient to discharge that burden. The record contained import documents and supporting material for both sets of goods, and the department did not establish that those documents were forged, fictitious, or otherwise unreliable. On the facts, the adjudicating authority had drawn an impermissible presumption of smuggling merely from foreign origin and alleged deficiencies in the defence.

Conclusion: The confiscation of both consignments and the penalties imposed on the appellants were not sustainable and were set aside.

Ratio Decidendi: Where goods are not notified under Section 123 or Chapter IVA of the Customs Act, the department must prove smuggled character by cogent evidence, and foreign origin alone does not justify confiscation or penalty.

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