Burden of proving smuggling lies on the department when foreign-origin goods are not notified for confiscation.

Foreign-origin goods not notified under Section 123 of the Customs Act remained subject to the ordinary rule that the department bore the burden of proving smuggling. Because that burden was not discharged, confiscation could not be sustained on mere recovery of the goods from the appellant's premises or on the rejection of the appellant's explanation. The goods were also outside Chapter IVA, so no statutory duty arose to maintain records of possession, storage, or sale. On these facts, the confiscation was held unjustified and the appeal succeeded.

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Issues: Whether goods of foreign origin seized from the appellant's premises were liable to confiscation in the absence of notification under Section 123 of the Customs Act or Chapter IVA of the Customs Act.

Analysis: The goods were not notified under Section 123 of the Customs Act, and therefore the ordinary rule applied that the burden to establish smuggling lay on the department. The department was required to prove that the goods had been smuggled into India, but it failed to discharge that burden. The goods were also not covered by Chapter IVA of the Customs Act, so there was no statutory obligation to maintain records regarding possession, storage, or sale of such goods. On these facts, confiscation could not be sustained merely because the goods were found in the appellant's premises and no satisfactory explanation was accepted below.

Conclusion: The confiscation was not justified, and the appeal succeeded in favour of the appellant.

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