Burden of proving smuggling remains on the Department; foreign markings alone cannot sustain confiscation or penalty.

The Department must prove smuggling before confiscation or penalty can be sustained; foreign markings alone do not create a presumption that seized electronic goods are smuggled. The initial burden remained on the Department, and it failed to produce evidence discharging that burden. The appellant was not required to prove lawful acquisition merely because purchase documents were not accepted, especially where the goods were used and freely available in the market. On those facts, confiscation under Section 125(1) of the Customs Act and penalty under Section 112(b) were unsustainable.

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Issues: Whether the Department had discharged the burden of proving that the seized electronic goods were smuggled and, consequently, whether confiscation and penalty could be sustained.

Analysis: The seized goods were not shown to be prohibited goods and no statutory presumption of smuggled character could be drawn merely from foreign markings. The initial burden lay on the Department to prove smuggling, and no evidence was produced to discharge that burden. Even if the appellant's purchase documents were not accepted, the burden did not shift to him to prove lawful acquisition. The goods were found to be used and freely available in the market, and no basis existed to treat them as smuggled.

Conclusion: Confiscation under Section 125(1) of the Customs Act and penalty under Section 112(b) of the Customs Act were unsustainable.

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