Burden on Revenue for non-notified goods led to setting aside confiscation and penalty for lack of proof of smuggling.

For non-notified goods, the Revenue had to prove that the raw silk yarn was smuggled before confiscation under the Customs Act, 1962 or imposition of penalty could be sustained. The record contained no satisfactory evidence of smuggling, and the appellant's statement did not establish that the sellers had imported or smuggled the goods. As the adjudicating authority had not properly dealt with the relevant evidence, the appellant was entitled to the benefit of doubt. Confiscation and penalty were therefore set aside, and consequential relief followed.

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Issues: Whether confiscation of raw silk yarn and imposition of penalty were sustainable when the goods were non-notified and the Revenue had not established that they were smuggled.

Analysis: The goods were treated as foreign-origin and confiscated under the Customs Act, 1962, but no satisfactory evidence was brought on record to show that the yarn had been smuggled into India. The goods were non-notified, so the burden remained on the Revenue to prove smuggled character. The statement of the appellant did not establish that the sellers had imported or smuggled the goods, and the adjudicating authority had not dealt with the evidence on that aspect. In the absence of proof, the appellant was entitled to the benefit of doubt.

Conclusion: The confiscation and penalty were set aside and the appeal was allowed with consequential relief to the appellant.

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