Circumstantial evidence can prove smuggled goods and guilty knowledge even without the Section 123 presumption.

Even where the Section 123 presumption under the Customs Act, 1962 did not apply, confiscation could still be sustained on cumulative circumstantial evidence and adverse inference from unexplained facts within the purchaser's special knowledge. The goods were traced to a fictitious consignor and a deliberately false invoice; the appellant admitted buying the goods from an unknown person, arranging despatch, and producing no purchase documents. His failure to promptly assert ownership also supported a finding of guilty knowledge. On that basis, the goods were treated as smuggled and the claim of bona fide lawful purchase was rejected, making confiscation lawful.

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Issues: Whether the confiscation of the seized goods was sustainable on the basis of circumstantial evidence and the appellant's conduct, notwithstanding the non-application of the statutory presumption under Section 123 of the Customs Act, 1962, and whether the appellant established a bona fide lawful purchase so as to defeat confiscation.

Analysis: The goods were found in a consignment covered by a fictitious consignor's name and a deliberately false invoice. The appellant admitted purchasing YKK zip fasteners from an unknown person at Madras, arranging despatch through lorry, and having no purchase documents. He also did not promptly assert ownership. On these facts, the circumstances were considered sufficient to show, on a prudent man's estimate, that the goods were smuggled and that the appellant had guilty knowledge. The absence of the presumption under Section 123 did not prevent reliance on surrounding circumstances, including the principles governing burden of proof and adverse inference from unexplained facts within the appellant's special knowledge.

Conclusion: The confiscation was held to be lawful, and the appellant's claim of bona fide purchase without knowledge of smuggling was rejected.

Ratio Decidendi: Even where Section 123 of the Customs Act, 1962 is not attracted, smuggled character and guilty knowledge may be proved by cumulative circumstantial evidence and adverse inference from unexplained facts within the purchaser's special knowledge.

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