Burden of proof and police statements in customs adjudication: Section 123 applies only to lawful seizure by a competent officer.

Section 123 of the Customs Act, 1962 applies only where covered goods are seized by a competent customs officer acting under the Act; a police recovery of gold biscuits does not trigger that statutory burden, so the Revenue must still prove the offence. A statement recorded by police under Section 161 of the Criminal Procedure Code is not substantive evidence in adjudication, and a recovery memo based on it cannot by itself prove seizure or liability under the Customs Act or the Gold Control Act, 1968. On that basis, the alleged seizure was not legally established and the penalty could not stand.

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Issues: (i) Whether the burden-of-proof rule in Section 123 of the Customs Act, 1962 applied when the alleged seizure of gold biscuits was made by the police and not by a proper customs officer; (ii) whether the police recovery memo and the appellant's statement recorded under Section 161 of the Code of Criminal Procedure, 1973 could be read as evidence in adjudication proceedings under the Customs Act, 1962 and the Gold Control Act, 1968.

Issue (i): Whether the burden-of-proof rule in Section 123 of the Customs Act, 1962 applied when the alleged seizure of gold biscuits was made by the police and not by a proper customs officer.

Analysis: The relevant statutory scheme vested search, examination, and seizure powers in customs officers under the Customs Act, 1962 and in authorised gold control officers under the Gold Control Act, 1968. Section 123 applied only where goods covered by that provision were seized under the Customs Act by a competent officer acting under the Act. A seizure made by the police, who were not acting as the proper officer under the Act, was not a seizure under the Act for purposes of Section 123. In that situation, the normal burden remained on the Revenue to prove the ingredients of the alleged offence.

Conclusion: Section 123 was inapplicable, and the burden of proof rested on the Revenue.

Issue (ii): Whether the police recovery memo and the appellant's statement recorded under Section 161 of the Code of Criminal Procedure, 1973 could be read as evidence in adjudication proceedings under the Customs Act, 1962 and the Gold Control Act, 1968.

Analysis: A statement recorded under Section 161 of the Code of Criminal Procedure, 1973 is not substantive evidence and can be used only in the limited manner permitted by Section 162 of that Code and Section 145 of the Indian Evidence Act, 1872 for contradiction. Such a statement, and a police recovery memo based on it, could not by themselves constitute proof in adjudication proceedings under the fiscal enactments. Since neither the seizure nor the statement was legally proved on the record, reliance on those materials was impermissible.

Conclusion: The police statement and recovery memo were not admissible as proof of seizure or liability in the adjudication proceedings.

Final Conclusion: The appellant succeeded because the alleged seizure was not established by competent evidence and the statutory burden under Section 123 did not shift to him; the penalty could not stand.

Ratio Decidendi: The burden-of-proof presumption under Section 123 of the Customs Act, 1962 arises only from a lawful seizure under the Act by a competent officer, and a statement recorded by police under Section 161 of the Code of Criminal Procedure, 1973 is not substantive evidence in fiscal adjudication proceedings.

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