Non-notified goods and burden of proof: confiscation fails without corroborative evidence of smuggling or illicit acquisition.

For non-notified diamonds, confiscation cannot be sustained unless the Revenue proves smuggling or illicit acquisition with reliable corroborative evidence. Where the assessee produces purchase vouchers, register entries and related documents showing bona fide purchase, and those documents are not effectively rebutted or verified, mere reliance on statements is insufficient to justify absolute confiscation under customs law. The operative principle is that the burden remains on the Revenue for non-notified goods, and unrebutted purchase records can defeat confiscation.

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Issues: Whether absolute confiscation of diamonds under Section 111(o) of the Customs Act, 1962 was sustainable when the goods were non-notified and the Revenue had to establish smuggled or illicit acquisition.

Analysis: The diamonds were not notified under Section 123 of the Customs Act, 1962, so the burden remained on the Revenue to prove illicit import or purchase. The appellant produced purchase vouchers, purchase register entries and related documents said to have been filed earlier in the proceedings. The finding in the remand order showed that these documents had already been produced and were not effectively rebutted. The Revenue did not lead corroborative evidence to disprove the documents or to establish that the diamonds were smuggled. Mere reliance on statements, without supporting verification, was insufficient to sustain confiscation.

Conclusion: The confiscation was not justified. The appellant succeeded in showing bona fide purchase, while the Revenue failed to discharge the burden of proof; the appeal was allowed and the impugned order was set aside.

Final Conclusion: The decision rests on the principle that for non-notified goods, confiscation cannot be sustained without reliable proof from the Revenue that the goods were smuggled or otherwise illegally acquired.

Ratio Decidendi: In cases concerning non-notified goods, the Revenue must prove smuggling or illicit acquisition with corroborative evidence, and bona fide purchase documents unrebutted by verification are sufficient to defeat confiscation.

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