Foreign origin alone cannot prove smuggling; confiscation needs positive evidence when section 123 does not apply.

Foreign origin alone was insufficient to prove smuggling of ball bearings or justify confiscation and penalties. Because the goods were not notified under section 123, the burden of proving lawful import did not shift to the possessor merely due to their presence in the Indian market. The authorities relied on no direct or circumstantial evidence of illegal import, and an unverified explanation for acquisition did not amount to proof of smuggling. Partial documentary support accepted for some seized goods further showed that non-verification of the remaining claim could not sustain a finding of smuggling. Confiscation under section 111(d) and penalties under section 112 were therefore unsustainable.

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Issues: Whether ball bearings of foreign origin could be treated as smuggled goods and confiscated, with penalties, in the absence of positive evidence of smuggling and without the benefit of the burden-shifting rule under section 123.

Analysis: The only material relied upon was that the goods were of foreign origin. No direct or circumstantial evidence showed illegal import or smuggling. The fact that the appellants could not fully verify their explanation for acquisition did not, by itself, establish smuggling. The authorities had themselves accepted documentary support for part of the seized goods and released them, which reinforced that non-verification of the remaining claim was not equivalent to proof of smuggling. Since ball bearings were not goods notified under section 123, the burden of proving lawful import did not shift to the possessor merely because the goods were found in the Indian market.

Conclusion: Foreign origin alone was insufficient to sustain confiscation under section 111(d) or penalties under section 112, and the finding of smuggling was unsustainable.

Ratio Decidendi: Where goods are not covered by section 123, confiscation for smuggling cannot rest solely on foreign origin or on an unverified explanation of lawful acquisition; positive evidence of smuggling is required.

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