Confiscation of non-notified goods requires proof of smuggling; mere absence of purchase documents is insufficient.

For goods that are neither prohibited nor notified under the Customs Act, confiscation cannot be sustained unless the department proves that they are smuggled. Mere inability to produce documents of licit acquisition, or denial of sale by suppliers, is insufficient without conclusive evidence of smuggling. On the facts, the department failed to establish the smuggled character of the foreign-origin mobile phones and other goods, so the confiscation order was not legally sustainable and the setting aside of confiscation was upheld.

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Issues: Whether confiscation of foreign-origin mobile phones and other goods could be sustained in the absence of proof that the goods were smuggled, particularly when the goods were neither prohibited nor notified under the Customs Act.

Analysis: The confiscation had been ordered on the basis that the respondent could not produce documents showing licit acquisition and the suppliers denied sale. The finding recorded that the department had not produced conclusive evidence to establish smuggled nature. The goods were described as neither prohibited nor notified under Section 123 or Chapter IVA of the Customs Act, 1962, and the governing principle applied was that, for such goods, confiscation cannot stand unless the department proves smuggling.

Conclusion: The confiscation was not legally sustainable and the order setting it aside was upheld.

Final Conclusion: In the absence of conclusive proof of smuggling, the Revenue's challenge to the setting aside of confiscation failed and the original relief in favour of the respondent remained undisturbed.

Ratio Decidendi: For goods that are neither prohibited nor notified, confiscation requires the department to prove their smuggled character; mere non-production of documents of licit possession is insufficient.

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