Burden of proving smuggling remained on revenue; unexplained possession alone did not justify confiscation or penalty.

Revenue bore the initial burden of proving that seized electronic goods were smuggled before confiscation could be sustained, and that burden did not shift to the respondent under the special-knowledge principle in Section 106 of the Evidence Act. The goods were treated as neither notified nor prohibited, and the fact-finding authority found no sufficient material showing a smuggled character. Mere possession of imported branded goods, even with an unexplained source of procurement, was held insufficient to prove clandestine import. The admissions relied upon were not treated as a clear concession of smuggling, so confiscation and penalty were held unsustainable.

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Issues: Whether the revenue discharged the burden of proving that the seized electronic goods were smuggled and liable to confiscation, and whether the burden shifted to the respondent under the special-knowledge principle.

Analysis: The goods were held not to be notified or prohibited goods, and the fact-finding authority concluded that they were not shown to bear a smuggled character. On the factual findings, mere possession of imported branded goods, even with an unexplained source of procurement, did not by itself establish clandestine import. The principle of special knowledge under Section 106 of the Evidence Act applies only where no other person can reasonably prove the fact in issue, and on the facts of the case the initial burden remained on the revenue to prove smuggling for attracting action under the Customs Act. The admissions relied upon did not amount to an able concession that the goods were smuggled.

Conclusion: The revenue failed to prove that the goods were smuggled, and no burden shifted to the respondent under Section 106 of the Evidence Act. The confiscation and penalty were not sustainable.

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